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Credit crunch leads to Moody's considering downgrading BayernLB

Business Materials 25 March 2008 21:38 (UTC +04:00)

( dpa ) - The international rating agency Moody's Investors Service said Tuesday it was considering reviewing its current rating for Munich-based state BayernLB, which has been hit by the global credit crisis.

Moody's said it was placing BayernLB9s 'C' bank financial strength rating on review for downgrading as a result of the bank's 32- billion-euros (50 billion dollars) exposure to structured credit products, including more than 4 billion euros, which is related to the US sub-prime mortgage market.

BayernLB expects its 2007 accounts to include write-downs totalling 1.9 billion euros.

But as a result of the bank's structured credit product exposure, Moody's sees BayernLB possibly facing further write-downs and valuation adjustments linked to US sub-prime and structured products, which could more than double this figure.

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