DBRS Downgrades Anglo Irish Bank Corporation Limited’s Hybrid Securities

DBRS has today downgraded the Tier 1 hybrid instrument ratings, including the Capital Securities and Perpetual Preferred Securities, of Anglo Irish Bank Corporation Limited (Anglo Irish or the Bank) and related entities, to BB (low) from A (low). The ratings remain Under Review with Negative Implications where they were placed on 19 January 2009.

Today’s rating action reflects DBRS’s concern that these securities may be used for loss-absorbing purposes, given the severely stressed operating environment in Anglo Irish’s core markets. While DBRS acknowledges that the Minster of Finance has stated that Anglo Irish will continue to service its Tier 1 hybrid instruments; DBRS also notes that the Board of Anglo Irish may temporarily forgo cash distributions under the terms and conditions of these instruments. As such, DBRS is increasingly concerned that Anglo Irish may temporarily forgo cash distributions in order to conserve capital to support the Bank.

DBRS will continue to monitor statements and actions by Anglo Irish’s management towards these hybrid instruments; providing comment and may take further rating actions as warranted.

Notes:
All figures are in EUR unless otherwise noted.

The applicable methodologies are, Analytical Background and Methodology for European Bank Ratings, Second Edition and Enhanced Methodology for Bank Ratings – Intrinsic and Support Assessments, which can be found on our website under Methodologies.

This is a Corporate (Financial Institutions) rating.