S&P lowers rating of United Bulgarian Bank to B+ on parent downgrade.

By bne IntelliNews April 1, 2011
International credit rating agency S&P has lowered the long-term counterparty credit rating on the countrys third largest United Bulgarian Bank (UBB) by one notch to B+ from BB, the agency said in a note on its website. In addition, the long-term rating of UBB remained on credit watch with negative implications. The move follows similar action on its parent, the National Bank of Greece (NBG). S&P commented that it has removed the one-notch uplift over the SACP assessment, which was previously incorporated in UBBs rating to account for additional parent support. The agency has also cut its SACP assessment by one notch to b+ from bb- to reflect the reliance of the local lender on funding support from NBG. As a result, the rating of UBB now is based only on UBBs SACP and does not include any uplifts for potential support on the part of its parent though NBG has not indicated so far that its stance toward support for UBB has declined. S&P said that NBG may withdraw its support for its subsidiary in case of pressure on its own financial stance. The credit watch negative reflects mainly that of its parent and will therefore depend on future actions on NBG but also on UBB contingency plans to replace NBG financing if the support is withdrawn.
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