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Moody’s downgrades Marfin Bank covered bonds

Ratings agency Moody’s Investor Services has downgraded Marfin Popular Bank covered bonds and put the Bank of Cyprus covered bonds on review for downgrade. The actions follow Moody’s downgrade of Cyprus’ sovereign debt rating last week.

YESTERDAY Moody’s Investors Service downgraded Marfin Popular Bank covered bonds and put the Bank of Cyprus covered bonds on review for downgrade.

According to the statement released by the ratings agency yesterday:

  • Covered bonds issued by Marfin Popular Bank (Marfin), backed by Cypriot residential mortgage loans (Marfin Cypriot Pool CB): downgraded to Ba3 on review for further downgrade; previously downgraded to Baa3 on 4 August 2011;
  • Covered bonds issued by Marfin, backed by Greek residential mortgage loans (Marfin Greek Pool CB): downgraded to Ba3 on review for further downgrade; previously downgraded to Baa3 on 4 August 2011;
  • Covered bonds issued by Bank of Cyprus Public Company Limited (BoC), backed by Greek residential mortgage loans (BoC Greek Pool CB): Baa3 placed on review for downgrade; previously downgraded to Baa3 on 4 August 2011.

In its statement, Moody’s said that: “Today’s rating action on the covered bonds is prompted by Moody’s downgrade of Cyprus’ sovereign debt and associated rating actions on Cypriot issuers of covered bonds”.

On 4 November, Moody’s downgraded Cyprus’s sovereign debt ratings by two notches to Baa3 on review for further downgrade.

On 8 November, Moody’s downgraded Marfin’s senior unsecured rating by three notches to B2 on review for further downgrade and BoC’s by one notch to Ba2 on review for further downgrade.

Further reading

Moody’s takes rating actions on covered bonds of Cypriot issuers (subscription)

Readers' comments

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  • So Over Cyprus says:

    Does anybody know what the implications of this will be on Marfin Laiki bank? What will happen next?

  • Robert Briggs says:

    @ “out of the frying pan into the fire”, they don’t have the decency or the guts to do anything and this also applies to the EC!

  • out of the frying pan into the fire says:

    I would like to think that one day the penny will drop. And they, the Cyprus government will put there property market (all aspects of it) in order. Then they may see a gradual increase in business. New funds coming in and a recovery in the economy.

    No chance why do things decently, honestly, in an open and fair way when you can rob people.

  • Mike says:

    Creative accounting seems to fool all the people all of the time. The simple fact is that if do not have the disposable income to spend and no accompanying debt then you cannot afford it. It seems to me that a housewife is far more astute financially than these so called whizz kids who can crap miracles then walk away with massive bonuses and salaries leaving the whole mess behind for others to balance. Cyprus is debt ridden, as many other countries are but Cyprus’ time to repay is closer than a lot of others.

  • @Robert Briggs – I don’t believe so. Developer loans would possibly be shown as commercial/business loans.

  • Robert Briggs says:

    The bonds covered by Residential Mortgage Loans, do these loans incorporate developer loans? If so it is understandable that the banks are being further downgraded.

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

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