The rating agency Moody’s Investors Service raised BayernLB's long-term issuer rating on 13 April 2017 by one notch from A2 to A1. The outlook remains unchanged at stable. BayernLB welcomes the positive ratings action by Moody’s. It sees the move as an endorsement of its sustained good business performance over the past few years and the success of its customer-focused business model.
The upgrade was based in particular on an improvement in BayernLB’s Baseline Credit Assessment (BCA) thanks to a better financial profile. Moody’s highlighted BayernLB’s solid fully loaded CET 1 ratio and good asset quality as primary reasons for its move. In addition, the structure of BayernLB's liability side resulted in a two-notch uplift in the Loss Given Failure Analysis (LGF).
The long term rating for deposits was likewise raised one notch from A1 to Aa3, the short-term rating remained unchanged at P-1. Moreover, Moody’s hiked the rating for subordinated bonds one notch to Baa2.
Moody’s press release with a detailed explanation of the reasoning behind the upgrade and all the rating changes can be found in the download box.