Moody’s has downgraded African Bank Limited’s local national scale issuer ratings to Caa2.za/Not Prime.za from A3.za/P- 2.za and its global senior debt and deposit ratings to Caa2/Not Prime, from Ba1/Not Prime. In addition, the long term global and national scale ratings have been placed on review for a further downgrade.
Moody’s stated that the downgrade of African Bank’s ratings reflect the expected losses that senior bondholders and wholesale depositors of the bank will sustain, following the announcement by the South African Reserve Bank (SARB) on 10 August 2014 that it placed African Bank under curatorship. The review for downgrade, in Moody’s view, captures the implementation risks of SARB’s restructuring plan for African Bank, in conjunction with the risk of higher than anticipated losses that depositors and bondholders, other than retail depositors, could incur.
