DBRS Downgrades and Withdraws the Non-Guaranteed Ratings of Irish Bank Resolution Corporation Ltd

DBRS, Inc. (DBRS) today downgraded the non-guaranteed senior debt ratings of Irish Bank Resolution Corporation Limited (IBRC or the Group), including its Issuer Rating to D, and has subsequently withdrawn all non-guaranteed debt ratings of the Group. Concurrently, DBRS has confirmed the A (low) long-term rating with Negative trend and the R-1 (low) short-term rating with Stable trend of the Irish Government Guaranteed instruments issued by IBRC.

Today’s action follows the Irish Government’s announcement of 6 February 2013 that IBRC is to be liquidated through the enactment of the Irish Bank Resolution Corporation Bill 2013. DBRS notes that the Government has stated that the normal priorities of the Companies Acts will apply during the liquidation process. As such, unsecured creditors of IBRC will be subordinated to the repayment of IBRC’s debt to the Central Bank of Ireland, which totalled some EUR 42.3 billion at 30 June 2012. While there was only EUR 169 million of non-guaranteed bonds outstanding as of 30 June 2012, DBRS’s views the likelihood that unsecured creditors will receive full or even partial recovery as highly remote.

In confirming the ratings of the Irish Government Guaranteed instruments, DBRS notes that the Government stated it expects that holders of guaranteed instruments will be repaid upon filing a claim under the ELG Scheme. The ratings of the Irish Government guaranteed are in line with DBRS’s rating of the Republic of Ireland, which was confirmed on 21 November 2012.

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

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations. Other methodologies used include the DBRS Criteria – Intrinsic and Support Assessments. Both can be found on the DBRS website under Methodologies.

The sources of information used for this rating include company documents, Minister for Finance, Central Bank of Ireland and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

Lead Analyst: Roger Lister
Rating Committee Chair: Alan G. Reid
Initial Rating Date: 7 September 2006
Most Recent Rating Update: 5 February 2013

For additional information on this rating, please refer to the linking document under Related Research.