Moody's Upgrades Raiffeisen Bank Zrt.'s Senior Unsecured Debt Ratings

Strategic Insights -

Raiffeisen Bank Zrt. (RBH), a Hungarian bank, has seen its senior unsecured debt ratings upgraded by one notch to Baa2 by Moody's Investors Service. This decision comes after the bank issued a significant amount of bail-in-able junior senior unsecured debt, which has increased the loss absorption for senior debt holders. Moody's has also updated its Advanced Loss Given Failure (LGF) analysis, resulting in a one-notch rating uplift for RBH's senior unsecured debt ratings. The stable outlook reflects the bank's ability to maintain its financial profile and liability structure over the next 12 months.

Key Takeaways:

  • Moody's has upgraded Raiffeisen Bank Zrt.'s senior unsecured debt ratings to Baa2, from Baa3, and its senior unsecured MTN program ratings to (P)Baa2, from (P)Baa3.
  • The upgrade reflects the bank's baa3 Baseline Credit Assessment (BCA) and Adjusted BCA, as well as the issuance of material volumes of bail-in-able junior senior unsecured debt.
  • The stable outlook on the long-term senior unsecured debt ratings reflects Moody's expectation that RBH will sustain its financial profile and current liability structure over the next 12 months.
  • An upgrade of RBH's senior unsecured debt ratings could result from an improvement in its financial profile beyond Moody's current expectations or the issuance of more loss-absorbing debt than anticipated.
  • A downgrade of the ratings could follow a significant weakening of RBH's solvency profile, mainly due to a sharp deterioration in asset quality and reduction of capital beyond Moody's expectations.

Statistics:

  • Moody's has upgraded Raiffeisen Bank Zrt.'s senior unsecured debt ratings by one notch, from Baa3 to Baa2.
  • The bank has issued a material volume of bail-in-able junior senior unsecured debt, exceeding Moody's prior expectations.
  • Moody's has applied a one-notch rating uplift for RBH's senior unsecured debt ratings, reflecting the increased loss absorption due to the new debt issuance.
  • The stable outlook on the long-term senior unsecured debt ratings reflects Moody's expectation that RBH will maintain its financial profile and liability structure over the next 12 months.

Sources:

  • Moody's Investor's Service, "Moody's has downgraded Raiffeisen Bank Zrt. Senior Unsecured Debt Ratings to Ba2"
  • Moody's Investor's Service, "Banks Methodology"
  • Rating Methodologies, "Banks, November 2024"

https://ratings.moodys.com/rmc-documents/432741