Moody's downgrades top lenders.

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16 building societies are to be downgraded by ratings agency Moody's, as losses are expected to mount.

Ratings agency Moody's has slashed its credit ratings on a number of building societies and lenders after warning of further losses to come as people struggle to pay their mortgages.
Moody's has downgraded a total of 16 building societies and lenders, including Abbey National and Alliance & Leicester, both part of the Spanish Santander Group, and Nationwide, in anticipation of further pain to come in the UK housing market as a result of the global economic crisis.
It has cut both its Bank Financial Strength Rating's (BFSR) on all the firms, as well as reducing some of its senior debt and deposit ratings.
The group's lead analyst for UK mortgage lenders, Marjan Riggi, said the actions had been taken following stress-testing scenarios which incorporated a peak to trough decline in house prices of 40%.

http://www.citywire.co.uk/personal/-/news/markets-companies-and-funds/content.aspx?ID=336800

Masomnia

Sorry, but a badly written article about a ratings agency which rated toxic assets AAA is not going to lessen my bullish attitudes

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Masomnia wrote: »

Sorry, but a badly written article about a ratings agency which rated toxic assets AAA is not going to lessen my bullish attitudes

Who didn't rate toxic assets as AAA ?, answers on the back of a stamp.

1984ReturnsForReal_2

ad9898 wrote: »

Who didn't rate toxic assets as AAA ?, answers on the back of a stamp.

Bolivar 10c green

Graham_Devon

Masomnia wrote: »

Sorry, but a badly written article about a ratings agency which rated toxic assets AAA is not going to lessen my bullish attitudes

But you will use the same agencies and people who couldnt even see the bust with it standing right in front of them to prove everything is hunky dory when they release some ramping article?

Strange analysis.

chucky

Graham_Devon wrote: »

But you will use the same agencies and people who couldnt even see the bust with it standing right in front of them to prove everything is hunky dory when they release some ramping article?

Strange analysis.

i worked at a Ratings Agency on one contract - i don't believe that they did much wrong at all.

the term toxic asset is subjective - to some institution it may not be at all and be a good investment. compare the lender that would go to Northern Rock and Coutts Bank for example.

Ratings Agencies were provided data that was analysed and they produced results from this data. to them it didn't matter if it's a bank or a toxic asset.

it's the banks that sold this on and used the Ratings Agencies stamp of approval on the asset. if anyone, i'd be pointing the finger at Regulators who should be defining what you can classify as AAA etc...

i wouldn't read too much into the article - downgrading a company doesn't mean much to the man in the street.

Markyt

Moodys infers exposure to BTL and commercial loans as well as capitalisation levels as reasons for downgrading.

YBS, for a start, does not do BTL or commercial loans and Fitchs last report said “In comparison to weaker peers, YBS has maintained its good wholesale funding franchise and a particularly strong capitalisation”.

So, its a bit of an odd report.

StevieJ

ad9898 wrote: »

Who didn't rate toxic assets as AAA ?, answers on the back of a stamp.

Presumably everyone who wasn't a rating agency

FraudBuster

I thought that the Dunfermline Building Society said that all it's lending was of the highest quality and that it had no toxic exposre.

purch

I thought that the Dunfermline Building Society said that all it's lending was of the highest quality and that it had no toxic exposre

If they said that then they were lying.

Dunfermline bought a truck load of Mortgages of dubious worth.

Ratings agency Moody's has slashed its credit ratings

I think that is overstating the actions.

Nationwides senior debt was reduced from Aa2 to Aa3....they couldn't downgrade it by a lesser amount !!!!

Reaper

purch wrote: »

If they said that then they were lying.

Dunfermline bought a truck load of Mortgages of dubious worth.

Here is what Dunfermline said when the banking crisis started:

We have an outstanding record for safety. The society is a financially robust, profitable and well-capitalised institution and has absolutely no exposure to subprime lending. Our arrears and provision levels are consistently below the industry averages.