Moody's: EIB, CEB views negative

Moody's Investors Service said it changed the outlook on the Aaa ratings of the European Investment Bank (EIB) and the Council of Europe Development Bank (CEB) to negative from stable.

At the same time, Moody's maintained the stable outlook on the Aaa rating of the European Bank for Reconstruction and Development.

As part of the action, Moody's affirmed the Aaa/Prime-1 ratings of all three multilateral development banks.

Moody's said the decision to change the outlook on the two banks to negative was driven by the following two factors: (a) The potential that low-probability but high-impact events, including the possibility of multiple exits from the euro area, would result in significant impairments to the assets of these multilateral development banks; and (b) together with the high likelihood that the credit standing of their largest shareholders, on whom the multilateral development banks would need to rely for additional capital in such extreme scenarios, would exhibit strong correlation.

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