Bradford & Bingley has had its financial strength downgraded by Moody’s Investors Service to C with an overall baseline credit assessment of A3.
In addition long-term deposit and senior debt ratings were also reduced and the ratings outlook was altered from ’stable’ to ‘negative’.
Justification of Moody’s action is based on the fact that B&B’s proportion of impaired loans
rose from 1.52% to 2.04% during 2007.
B&B are keen to downplay the significance of these adjustments and in point of fact Moody’s support action taken to improve its liquidity position.
However, Moody’s “remains concerned about the ability of the bank to raise further funding if current market conditions persist for a longer period of time.”
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