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S&P Downgrades 4 French Banks' Long-Term Ratings


Standard & Poor's downgraded the long-term credit ratings on some French banks, a move expected by markets and a result of its earlier cut in France's sovereign credit rating.


On Jan. 13, S&P cut France's rating by one notch to AA+, invoking the ongoing debt crisis in the euro zone, and some analysts said the country would have to undergo a profound reform to recover its triple-A status.

The rating agency cut Societe Generale, Credit Agricole and Groupe BPCE to A from A+, with a stable outlook and cut its credit rating on Caisse des Depots et Consignations to AA+ from AAA, with a negative outlook.

"We have also affirmed the 'AA-/A-1+' long- and short-term counterparty credit ratings on BNP Paribas and the long-term 'AA-' rating on Credit Logement," the agency said in a statement.

It added that French banks were likely to achieve their funding programs for this year.

"We consider that French banks will be able to maintain their lending activity in their core businesses," the statement said.

"They should achieve their funding programs for 2012 either through unsecured public placements or through a mix of alternative sources—private placements, debt issued to network clientele, or covered bond instruments," it said.

Societe Generale said in a statement that the downgrade was expected and "a direct consequence of the methodology used by S&P, which builds into our rating an element of systemic support by the French state, whose own sovereign rating has been recently cut."

"In an environment in which banks' ratings are all being lowered, Societe Generale retains a rating which is among the most solid in Europe and in the world," the bank added.