(The following statement was released by the rating agency)
-- We consider that the nondeferrable senior subordinated debt of
Hypothekenbank Frankfurt AG has the same likelihood of receiving support from
the parent Commerzbank AG in case of need as Commerzbank's own nondeferrable
senior subordinated debt.
-- We are therefore affirming the 'BBB' rating on Hypothekenbank
Frankfurt's nondeferrable senior subordinated debt, and removing it from
CreditWatch with negative implications.
Nov 16 - Standard & Poor's Ratings Services said today that it had affirmed the
'BBB' rating on the nondeferrable senior subordinated debt of Hypothekenbank
Frankfurt AG (formerly Eurohypo AG) and removed it from CreditWatch with
negative implications. No other ratings on Hypothekenbank Frankfurt AG
(A-/Negative/A-2) are affected by this rating action.
The rating had been on CreditWatch negative reflecting our uncertainty about
future support for Hypothekenbank Frankfurt's nondeferrable senior
subordinated debt from the bank's parent Commerzbank AG (A/Negative/A-1). We
have subsequently examined the latest information available regarding the
details of the run-down process of Hypothekenbank Frankfurt and have had
discussions with management on Hypothekenbank Frankfurt's restructuring
progress. As a result, we have concluded that Hypothekenbank Frankfurt's
nondeferrable senior subordinated debt has the same likelihood of receiving
support from the parent Commerzbank in case of need as Commerzbank's own
nondeferrable senior subordinated debt. The rating on this debt is thus on the
same level as the ratings on Commerzbank's nondeferrable senior subordinated
debt, that is, one notch below Commerzbank's stand-alone credit profile (SACP).
We don't factor in any uplift for potential government support in our issue
ratings on nondeferrable subordinated instruments. The issue ratings solely
reflect Commerzbank's SACP. An SACP reflects our view of a bank's credit risk
without extraordinary support from the government. We believe that by notching
from the SACP, we better capture the greater likelihood that government
intervention will not be available to support subordinated debt issues.
(Caryn Trokie, New York Ratings Unit)