Fitch drops Commerzbank, debt to BBB

Fitch Ratings said it downgraded Commerzbank AG's long-term issuer default rating and senior debt ratings to BBB from A+. The viability rating was affirmed at bbb.

At the same time, the agency downgraded the issuer default rating and support rating of Commerzbank’s subsidiary mBank. The outlook on the long-term issuer default rating is positive.

Fitch said the actions are in conjunction with its review of sovereign support for banks globally, which the agency announced in March 2014. In line with its expectations announced in March last year and communicated regularly since then, the agency believes legislative, regulatory and policy initiatives have substantially reduced the likelihood of sovereign support for U.S., Swiss and European Union commercial banks.

As a result, Fitch believes that, in line with its support rating definition of 5, extraordinary external support, while possible, can no longer be relied upon for Commerzbank. The agency therefore downgraded its support rating to 5 from 1 and revised its support rating floor to No Floor from A+.

Following the revisions to the expectations for state support, the long-term issuer default rating is now driven by Commerzbank’s standalone creditworthiness as expressed in its viability rating.

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