TEXT-S&P affirms Portuguese bank rtgs; outlooks remain negative

(The following statement was released by the rating agency)

July 11 - Standard & Poor's Ratings Services today said it has affirmed its ratings on six Portugal-based financial institutions: Banco BPI S.A. (BPI) and its core subsidiary Banco Portugues de Investimento S.A., Banco Comercial Portugues S.A. (Millennium bcp), Caixa Geral de Depositos S.A. (CGD), and Banco Espirito Santo S.A. (BES) and its core subsidiary Banco Espirito Santo de Investimento S.A. (BESI) (see Ratings List). The outlooks on the long-term ratings remain negative.

At the same time, we took various negative rating actions or CreditWatch placements on the nondeferrable subordinated debt, preferred stock, and junior subordinated debt of BPI, Millennium bcp, and CGD.

The rating actions follow our review of the implications of the recent recapitalization measures taken by these Portuguese banks. We had already incorporated into our ratings the likelihood that these Portuguese banks would reinforce their capital this year to comply with the European Banking Authority's (EBA) 9% core tier 1 ratio by end-June 2012, and with the Bank of Portugal's 10% core Tier 1 ratio by year-end 2012.