DBRS Downgrades Irish Guaranteed Debt Issued by the Bank of Ireland to A (high), Trend Negative

DBRS Inc. (DBRS) today has downgraded the long-term ratings of the Irish Government Guaranteed instruments issued by The Governor and Company of the Bank of Ireland (Bank of Ireland or the Bank) to A (high) from AA. Concurrently, DBRS has downgraded the ratings of Short-Term Deposits and Short-Term Debt Guaranteed by the Irish Government to R-1 (middle) from R-1 (high). The trend on all Government Guaranteed ratings is Negative. This rating action follows DBRS’s downgrade of the Republic of Ireland to A (high) with a Negative trend. The Bank’s government guaranteed ratings have been removed from Under Review with Negative Implications that was assigned on 5 October 2010.

Additionally, given the rating action on the sovereign rating, DBRS has today changed the trend on the A (high) floor rating for critically important banking organisations (CIBs) in Ireland to Negative from Stable. Given Bank of Ireland’s status as a CIB, DBRS today has revised the trend on the Non-Guaranteed Long-term Deposits and Non-Guaranteed Long-Term Debt ratings of the Bank, to Negative from Stable. DBRS still sees the Irish Government as having the ability and the willingness to continue to support its CIBs at the A (high) level. Indeed, the recently agreed upon E.U./IMF support program includes EUR 35 billion for the Irish Government to support and recapitalise the Banks. The Negative trend reflects DBRS’s view that additional weakening of the sovereign’s rating could result in a corresponding lowering of the floor rating level for CIBs in Ireland.

Today’s rating action does not impact the ratings of Bank of Ireland’s non-senior debt instruments, including its Dated Subordinated Debt rating of BB, which remain Under Review with Negative Implications, where they were placed on 3 December 2010.

Notes:
All figures are in Euros (EUR) unless otherwise noted.

The applicable methodologies are Global Methodology for Rating Banks and Banking Organisations and Enhanced Methodology for Bank Ratings – Intrinsic and Support Assessments, which can be found on our website under Methodologies.

Lead Analyst: Steve Picarillo
Rating Committee Chair: Alan G. Reid

Initial Rating Date: 5 September 2005
Most Recent Rating Update: 3 December 2010

The sources of information used for this rating include the DBRS rating of the Republic of Ireland. For further information related to DBRS's rating of the Republic of Ireland, please see the related press release below.

For additional information on this rating please refer to the linking document located below.