DBRS Downgrades Ratings of ESFG to “D” After Announced Request for Controlled Management

DBRS, Inc. (DBRS) today downgraded the ratings of Espírito Santo Financial Group (ESFG or the Group) including its Senior Long-term Debt and Senior Convertible Bonds rating due 2025 ratings to D from CC, its Dated Subordinated Debt rating to D from CC (low) and its Short-Term Instruments rating to D from R-5.

Today’s rating action follows ESFG’s announcement on 24 July 2014 that it has requested the Luxembourg Courts for controlled management (“Gestion Contrôlée”) under Luxembourg Law. This request comes following the Group’s recognition that it will be unable to meet its obligations under its commercial paper programme and its own standalone debt obligations.

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

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations (June 2014). Other applicable methodologies include the DBRS Criteria – Support Assessments for Banks and Banking Organisations (January 2014) and DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities (December 2013). These can be found at: http://www.dbrs.com/about/methodologies

The sources of information used for this rating include company documents 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: Lisa Kwasnowski
Rating Committee Chair: Elisabeth Rudman
Initial Rating Date: April 20, 2011
Most Recent Rating Update: July 15, 2014

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