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TEXT-S&P affirms Greece-based Piraeus Bank at 'CCC/C', outlook neg
October 24, 2012 / 9:26 AM / in 5 years

TEXT-S&P affirms Greece-based Piraeus Bank at 'CCC/C', outlook neg

Oct 24 -

Overview

-- On Oct. 19, 2012, Piraeus Bank announced the acquisition of Geniki Bank from Societe Generale.

-- We believe the acquisition will have a limited impact on Piraeus’ credit profile, given Geniki Bank’s small size and the pre-acquisition capital injection by Societe Generale.

-- We are therefore affirming our ‘CCC’ long-term and ‘C’ short-term ratings on Piraeus.

-- The negative outlook reflects the possibility that we could downgrade Piraeus if we believed the bank would default on its obligations.

Rating Action

On Oct. 24, 2012, Standard & Poor’s Ratings Services affirmed its ‘CCC/C’ long-term and short-term counterparty credit ratings on Greece-based Piraeus Bank S.A. The outlook is negative. At the same time, we affirmed our ‘CC’ issue ratings on the debt securities issued by Piraeus Group Capital Ltd. and by Piraeus Group Finance PLC and guaranteed by Piraeus.

Rationale

The affirmation follows Piraeus’ acquisition of 99.08% of shares of Geniki Bank (not rated) from Societe Generale (A/Stable/A-1) for a consideration of EUR1 million. It reflects our opinion that, at the current rating, the operation will likely have a limited impact on our assessment of Piraeus’ financial profile. This is because of the relatively small size of Geniki Bank and because we believe the terms of the agreement substantially mitigate the potential risk that might arise from it.

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