For all the speculation over how far Moody's Investors Service will lower the credit ratings of the world's largest banks, debt traders are already treating the firms like they're graded lower than the biggest potential cuts.
Bonds issued by Morgan Stanley and Credit Agricole SA have dropped to prices implying junk ratings, while credit-default swaps on Bank of America Corp., Goldman Sachs Group Inc. and BNP Paribas SA are trading as if the lenders were speculative-grade issuers, according to a separate Moody's unit that analyzes market data. Even the harshest downgrades in the ratings firm's review would leave those banks investment grade.
Investors are fleeing global financial institutions as Europe's escalating fiscal crisis threatens to poison the balance sheets of the region's lenders and spread to trading partners globally. Moody's, which has been reducing ratings for banks from Australia to Austria, has said that 15 banks with a combined $28.2 trillion of assets may be the next group it cuts as part of a review that will conclude this month.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
- Exclusive discounts on ALM and Treasury & Risk events.
- Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
*May exclude premium content
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
