Standard & Poor's said on Wednesday evening it had withdrawn its credit rating on Rabobank New Zealand at the request of the bank. Late on Thursday evening Standard and Poor's said it had reinstated the AA rating with a negative outlook at Rabobank's request. Rabobank said it had reversed the withdrawal after consultation with the Reserve Bank.
Rabobank’s New Zealand CEO Ben Russell said the bank had originally asked for the rating withdrawal on the local unit because all senior New Zealand wholesale debt issuances were undertaken by another of its entities, Rabobank Nederland NZ Branch.
“Rabobank deposits in New Zealand, including RaboDirect deposits, are guaranteed by Rabobank Nederland, which has a AA rating from S&P. The bank initially formed the view that in light of this guarantee, an independent credit rating for RNZL was not necessary. However, in consultation with the Reserve Bank of New Zealand and for regulatory reasons, Rabobank sought reinstatement of a rating for RNZL from S&P,” he said.
“This rating for RNZL has now been restored by S&P.”
S&P had Rabobank at AA with a negative outlook, having downgraded the bank - along with its Dutch parent - from its highest possible AAA rating last November (to AA with a positive outlook) when the credit rating agency applied new ratings criteria to banks.
At the time of the rating withdrawal S&P said Rabobank NZ's rating was equalised with that of its parent - Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland)) - reflecting an unconditional guarantee provided by Rabobank Nederland covering all the obligations of Rabobank NZ, including deposits with online banking unit RaboDirect.
S&P has the big four local banks - ANZ NZ, ASB, BNZ and Westpac - at AA-.
A Rabobank spokeswoman said earlier on Thursday because Rabobank NZ isn't an issuer under the group's medium term notes programme it doesn't require a credit rating.
"All our (debt) issuances are done under the branch entity Rabobank Nederland NZ branch, which carries the parent company rating of AA from S&P."
Late on Thursday, Standard and Poor's said the AA rating (negative outlook) rating for Rabobank NZ Ltd had been reinstated at Rabobank's request.
"The ratings on Rabobank New Zealand are equalised to that of Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland)) (AA/Negative/A-1+), reflecting an unconditional guarantee provided by Rabobank Nederland covering all obligations of Rabobank New Zealand," Standard and Poor's said.
Last month Moody's Investors Service cut its credit rating on both Rabobank Nederland and Rabobank NZ by two notches, citing pressures on both profitability and asset quality through an unfavourable operating environment in both the Netherlands and euro-zone. Moody's cut Rabobank to Aa2 with a stable outlook from Aaa, its highest possible rating. Moody's has ANZ NZ, ASB, BNZ and Westpac NZ a notch lower at Aa3.
(Updated with comments from Rabobank spokeswoman. Updated at 6.40 pm on Thursday after Standard and Poor's reinstated the rating at Rabobank's request. Also updated with Rabobank comment).
39 Comments
More likely this no longer applies?
NZ's rating was equalised with that of its parent - Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland)) - reflecting an unconditional guarantee provided by Rabobank Nederland covering all the obligations of Rabobank NZ, including deposits with online banking unit RaboDirect.
Hey guys. Take a chill pill. The term deposits are still guaranteed by the parent, which still has a AA rating, which is still stronger than the big four banks here.
Let's not speculate or suggest anything that might cause unnecessary worry for people.
cheers
Bernard
This is becoming curiouser and curiouser -
A Rabobank spokeswoman said because Rabobank NZ isn't an issuer under the group's medium term notes programme it doesn't require a credit rating.
Kate says the parent guarantee will be null and void: But here in NZ, the OBR effectively terminates any such guarantee by local regulation.
How do NZer's assess the creditworthiness of an OBR dependent bank - the very signals the RBNZ exhorts depositors to seek out for decision making purposes are about to disappear in this case? And Bernard's advice is to chill out - that doesn't cut it in this dealing room.
Remember, unless the RBNZ defers implimentation yet again, depositors have a year to sort this out before OBR is operational.
Oh no Kate, I have to drop them down my list , now they are just behind Westapac still ahead of BNZ /ANZ.
They have a few problems in the Uk.
Two London-based traders have reportedly been suspended from the London division of Mitsubishi UFJ Financial Group as part of a probe into Libor abuses at Rabobank.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9390362…
See here;
http://www.bonusbonds.co.nz/bonusBondsTrust.html
When you purchase Bonus Bonds, your money is collected together with the money from all other bondholders and held in Trust, independent of any other schemes or deposits. Called the Bonus Bonds Trust, the Trust is supervised by Trustee Executors Limited, an independent corporate trustee.
Mind, someone who understands these things needs to read the trust document .. my best guess is that the bonds are not subject to the OBR - so could be the best bet (pun intended) in town in terms of a repository for fiat balances in the meantime.
PS - winnings are not taxed.
LOL - but it's just not funny for my 90 year old mother-in-law.
It's coming down to : he who files first, files best.
from the net, The counterparty credit ratings on Rabobank Australia Ltd. (Rabobank Australia) reflect those on its ultimate parent Rabobank Nederland (Rabobank; AAA/Stable/A-1+), as a result of an unconditional guarantee provided by the parent that covers all of Rabobank Australia's obligations. Although Rabobank has the ability to revoke the guarantee with a minimum of three months' notice, obligations incurred before the termination date will continue to be covered until those obligations mature. Standard & Poor's Ratings Services believes that the likelihood of Rabobank terminating the guarantee is remote. Don’t forget, as a RaboDirect customer, all your deposits are guaranteed by our ultimate parent bank, Rabobank.
John - here's the RBNZ Q+A on the subject;
http://www.rbnz.govt.nz/finstab/banking/4368385.html
And here is a paper they did on 'Sudden Stops' - which explains just how this would be applied should a crisis unfold;
http://www.rbnz.govt.nz/research/bulletin/2007_2011/2011dec74__4hargreaveswatson.pdf
MELBOURNE (Standard & Poor's) July 11, 2012-Standard & Poor's Ratings Services said today that its 'AA/Negative/A-1+' issuer credit ratings (ICR) on New Zealand-based Rabobank New Zealand Ltd. (Rabobank New Zealand) have been withdrawn at the request of the issuer. At the time of withdrawal, the ICR on Rabobank Australia were equalised with that of Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland)) (AA/Negative/A-1+), reflecting an unconditional guarantee provided by Rabobank Nederland covering all obligations of Rabobank New Zealand
And here's the one S&P sent me:
Ratings On New Zealand-based Rabobank New Zealand Ltd. Withdrawn At Issuer’s RequestMELBOURNE (Standard & Poor's) July 11, 2012--Standard & Poor's Ratings Services said today that it’s ‘AA/Negative/A-1+’ issuer credit ratings (ICR) on New Zealand-based Rabobank New Zealand Ltd. (Rabobank New Zealand) have been withdrawn at the request of the issuer. At the time of withdrawal, the ICR on Rabobank New Zealand were equalised with that of Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland)) (AA/Negative/A-1+), reflecting an unconditional guarantee provided by Rabobank Nederland covering all obligations of Rabobank New Zealand.
Can't find S&Ps but here Moody's policy regards withdrawl of credit ratings.
"AUSTRALIAN banks are finalising ''living wills'', which are due to be submitted to regulators by the end of this month" from http://www.theage.com.au/business/banks-warn-living-wills-come-at-a-cos…
It will be interesting to see what those wills say about NZ subsidiaries if anything.
FYI this just in from Standard and Poor's:
Standard & Poor's Ratings Services said today that it has reinstated its ‘AA/A-1+’ issuer credit ratings on New Zealand-based Rabobank New Zealand Ltd. (Rabobank New Zealand), at the request of Rabobank New Zealand. The outlook is negative.
The ratings on Rabobank New Zealand are equalised to that of Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland)) (AA/Negative/A-1+), reflecting an unconditional guarantee provided by Rabobank Nederland covering all obligations of Rabobank New Zealand.
I'll update the story above.
cheers
Bernard
If you have half a mind.....(like me)....it may help to fix the future of all honest banking.
http://www.avaaz.org/en/bankers_behind_bars_f/?bzvFEab&v=15942
Maybe there will be one for politicians next.
I can only hope.
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