DBRS Revises Northern Rock plc A (low) to Under Review - Developing

DBRS has today revised the review status of Northern Rock plc’s (Northern Rock or the Company) A (low) Issuer Rating and R-1 (low) Commercial Paper rating to Under Review – Developing from Under Review with Positive Implications.

Today’s rating action reflects the uncertainty surrounding the ongoing restructuring of Northern Rock. The pending legal and capital restructuring of Northern Rock could result in negative ratings pressure should the result of the restructuring leave bondholders with weakened support or in a weakened position. Further, today’s rating action reflects the uncertainties surrounding Northern Rock’s capital adequacy, its longer term earnings generation ability and its ultimate final structure.

DBRS’s review will include an analysis of Northern Rock’s legal structure, as well as an assessment of the earnings generation ability, capital position and level of government support of each entity should the Company’s balance sheet be separated into more than one legal entity.

Notes:
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.