(ANSA) - MILAN, MARCH 20 - S&P Global Ratings placed the Credit Suisse group rating "with positive implications" under observation and downgraded the rating on AT1 hybrid capital instruments issued by Credit Suisse Group AG to 'C' from 'B' and 'B+' after the merger agreement with Ubs.
If the rating is successful, they will be equated to those of Ubs.
"We believe that the UBS group is materially stronger than the Credit Suisse group. The acquisition will therefore benefit the company by stabilizing its franchise, as well as its financing and liquidity. It should also drive a strengthening of Credit Suisse's risk management and governance standards " the analysts explain.
As part of the transaction, FINMA ruled that Credit Suisse's AT1 capital will be written off.
The aggregate nominal amount of these instruments is around CHF 16 billion.
"Accordingly, we have downgraded our ratings on them to 'C'. In our view, default on these instruments is a virtual certainty and we expect to downgrade the issue ratings to 'D' once the implementation of the downgrade is confirmed," they add.
Moody's also put Credit Suisse's ratings on watch for a possible upgrade as they were being watched for cuts.
The decision follows the announcement that the second Swiss banking group will be acquired by UBS.
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