"The downgrade of the deposit ratings reflects Moody's expectations that Corpbank's uninsured depositors will likely incur significant losses, commensurate with a C rating, following the results of the audit commissioned by the Bulgarian National Bank (BNB), which indicated significant impairment losses and a negative equity position for the bank," Moody's said in a statement.
According to the statement, the withdrawal of the bank's ratings reflects the decision of the Bulgarian National Bank to revoke its licence, place Corpbank under resolution and initiate repayment of insured deposits.
Moody's also said in the statement:
"The downgrade of the deposit ratings reflects Moody's expectations that Corpbank's uninsured depositors will incur significant losses commensurate with a C rating, the lowest level on Moody's 21 point scale. Moody's expectations are based on the results of the audit commissioned by the BNB, which indicated significant impairment losses and a negative equity position for the bank of BGN3.75 billion as of September 2014. Specifically, as a result of the capital shortfall, Moody's expects that uninsured deposits, estimated at BGN1.99 billion and ranking junior to insured deposits of BGN3.68 billion, will likely incur significant losses equivalent with a C rating.
The withdrawal of Corpbank's ratings reflects the Bulgarian authorities decision to revoke its license, place the bank under resolution and initiate repayment of insured deposits which begun on 4 December by the Bulgarian Deposit Insurance Fund with funds being distributed through other Bulgarian banks.
- Long-term local- and foreign-currency deposit ratings downgraded to C from Ca and will be withdrawn
- Standalone bank financial strength rating (BFSR) affirmed at E -- equivalent to a baseline credit assessment (BCA) of c and will be
withdrawn
- Short-term deposit ratings of Not-Prime not subject to any rating change and will be withdrawn"
