Moody's downgrades International Investment Bank to 'Junk' status
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Moody's Investors Service has downgraded the Budapest-based International Investment Bank's (IIB) long-term issuer and senior unsecured debt ratings to "Ba1" from "A3."
At the same time, Moody's has placed IIB's ratings on review for further downgrade.
The action was triggered by the unexpected joint announcement of four European Union shareholders to plan to withdraw from the bank, published on March 2.
In their announcement, the Ministries of Finance of the Czech Republic, Romania, Slovakia, and Bulgaria state their intention to discontinue their shareholder participation in IIB, aiming for an orderly withdrawal.
Upon their withdrawal, Russia and Hungary will be the dominant shareholders in IIB.
Consequently, Moody's no longer assumes that these shareholders will provide additional non-contractual support to the bank in a situation of financial stress, Moodys.com reports.
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