Downgrade of EBS bonds by Moody’s

Dublin: Global ratings agency Moody’s has downgraded some of the bonds that the EBS has issued after the lender was forced to stop paying interest on the debt.

It downgraded the non-cumulative Tier 1 instruments of EBS Building Society to Ca from Caa1 (issued through EBS Capital No1 SA) and the dated subordinated debt one notch to Baa1 from A3.

These rating actions follow the issuance of a Special Investment Share (SIS) to the Irish Government that effectively nationalises the lender.

The other ratings of the society including the D BFSR, the A2 long-term bank deposit and senior debt rating and the Aa1-rated Government guaranteed debt were all unaffected.

The downgrade of the non-cumulative Tier 1 instruments to Ca follows the society’s announcement that, as a result of the terms of the SIS and the Promissory Note, EBS is prohibited from making any discretionary payments on its existing regulatory capital instruments.