Moody’s has downgraded Britannia to D+ from C and has been placed it on review with direction uncertain “reflecting the pressure from its weak intrinsic strength”.
Chelsea has been downgraded to E+ from C with a negative outlook, and Coventry is downgraded to C- from C+, also with a negative outlook.
Moody’s has also downgraded Nationwide to C- from B and has downgraded its subordinated debt. Newcastle has been downgraded to D- from C-, and Norwich & Peterborough has been downgraded from C to D. Principality and Skipton have been downgraded to C- and C+ respectively.
West Bromwich has been pushed down from C- to E+ and Yorkshire down to D+ from C.
Moody’s senior credit officer and lead analyst for UK mortgage lenders Marjan Riggi, says: “These rating actions include the results derived from the analysis of various stress scenarios, incorporating a peak-to-trough house price decline of 40 per cent for our base scenario, and compared this to banks’ exposure to different asset classes – prime, sub-prime, buy-to-let, self-certified and second charge.
Taking into account loan-to-value-buckets, which already reflected a double-digit house price decline. We also stressed the non-housing-association-related parts of the banks’ commercial loan portfolio – whose performance has already come under considerable pressure in this economic downturn, and which we expect to worsen significantly over the next couple of years.”