S&P downgrades Credit Suisse Group, Moody’s cuts some ratings

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FILE PHOTO: A man enters the Credit Suisse offices in the Manhattan borough of New York

ZURICH (Reuters) – S&P Global Ratings has downgraded Credit Suisse Group’s long-term issuer credit rating by one notch to BBB- and cut its view on main operating unit Credit Suisse AG and other core subsidiaries to A-/A-2 from A/A-1.

In a note dated Nov. 1, S&P cited execution and franchise risks under the Swiss bank’s restructuring plan announced last week that envisions raising new capital, cutting thousands of jobs and shifting its focus even further away from investment banking in favour of wealth management.

S&P has a stable outlook on the ratings.

Separately, Moody’s downgraded some of its ratings for Credit Suisse AG following the bank’s strategy overhaul but kept its rating for the overarching group unchanged.

It downgraded Credit Suisse AG’s senior unsecured debt from A2 to A3 on Tuesday while retaining Credit Suisse Group’s senior unsecured debt rating of Baa2.

The outlook on these ratings remains negative because of the Swiss bank’s weakened liquidity position, the negative pressures associated with the timeframe for the bank’s return to profitability and the risks associated with the restructuring plan, Moody’s said.

Moody’s also downgraded Credit Suisse AG’s Baseline Credit Assessment (BCA) and Adjusted BCA to ba1 from baa3 and its long-term Counterparty Risk Assessment to A3 from A2.

The long-term senior unsecured debt, issuer as well as deposit ratings of all of CS’s subsidiaries – where applicable – have also been downgraded by one notch to A3 from A2.

All short-term ratings were downgraded to P-2 from P-1.

DBRS Morningstar downgraded Credit Suisse AG’s long-term issuer rating to “A (low)”; and the long-term issuer rating of Credit Suisse Group to BBB (high).

(Reporting by Noele Illien and Michael Shields; editing by Jason Neely and Angus MacSwan)