WBrief: UBS's credit rating to be cut severely? - Spear's Magazine

WBrief: UBS’s credit rating to be cut severely?

UBS’s credit ratings may be cut by more than one notch by the rating agency Moody’s Investor Services, which is concerned about challenges to its investment banking and wealth management operations.

UBS’s credit ratings may be cut by more than one notch by the rating agency Moody’s Investor Services, which is concerned about challenges to its investment banking and wealth management operations.

Moody’s said it may cut the bank’s Aa2 long-term senior debt and deposit ratings and it Aa3 subordinated debt ratings. The downgrades will be limited to one or two notches at most, the rating agency said in a statement late yesterday.

“The review reflects Moody’s view of the considerable challenges that UBS continues to face in its two largest business lines: investment banking and wealth management,” said David Fanger, Moody’s senior vice president.

“Moody’s believes these challenges are unlikely to be short-lived, and pose greater risk to bondholders than it had previously believed. In addition, while the bank has benefitted from substantial capital infusions over the past two years, the bank’s ability to generate capital internally remains challenged,” he said.

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