Research Update: Dexia Bank's Subordinated Debt Lowered To 'BB+'; 'A-/A-2' Ratings Remain On CreditWatch With Developing Implications Nov 11

Standard & Poors, November 2011

Abstract
The Belgian government acquired Dexia Bank on Oct. 20, 2011, to prevent a loss of public confidence in the institution. The European Commission on Oct. 17, 2011, opened an investigation following the second round of state aid to Dexia, including the acquisition of Dexia Bank. We are lowering the subordinated debt ratings on Dexia Bank ratings to 'BB+' from 'BBB+' because we view a possibility that the EC could impose a debt restructuring detrimental to subordinated bondholders. We are keeping the 'A-/A-2' issuer credit ratings on Dexia Bank on CreditWatch with developing implications, which indicates the possibility of an upgrade or downgrade depending on whether we believe the bank can rapidly reduce its exposure to Dexia group and maintain a...

Companies mentioned in this report are:
- Belfius Bank
- Belfius Funding
- Dexia Credit Local
- Dexia Financial Products, Inc.
- Belfius Financing Company
- Dexia Secured Funding Belgium N.V.

Action: CreditWatch Update
Action: Downgraded

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Product Type: Research Update
Research updates complement media releases. They offer more depth and detail than summary analyses by incorporating all information published in the media release. They are more up to date than summaries in that they are published simultaneously with media releases.

- Belfius Bank
- Belfius Funding
- Dexia Credit Local
- Dexia Financial Products, Inc.
- Belfius Financing Company
- Dexia Secured Funding Belgium N.V.

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