Moody's lowers CorpBanca, CorpGroup

Moody's Investors Service said it downgraded CorpBanca's global local and foreign currency deposit and debt ratings to Baa3 from Baa2, and lowered the bank's short-term deposit ratings to Prime-3 from Prime-2.

The agency also lowered the bank's standalone baseline credit assessment to ba1 from baa3, which maps to a D+ standalone bank financial strength rating.

At the same time, Moody's lowered the local and foreign currency issuer and senior debt ratings of CorpGroup Banking SA, the bank's direct holding company, to B1 from Ba3.

The ratings of the bank and holding company had been placed on review for downgrade on Aug. 30, and remain on review for further downgrade.

In downgrading the ratings of CorpBanca and CorpGroup Banking, Moody's noted its concerns that the entities' association with the financially troubled SMU SA (Caa1, negative) via their common principal shareholder together with certain transactions within the financial group has hurt the funding flexibility and risk profile of both the bank and its holding.

These entities require maximum funding flexibility to execute their business development strategy in Chile and Colombia, and reduced funding flexibility could impair the growth and profitability of the bank's franchise, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.