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Investing.com -- Moody’s Ratings has affirmed Ayvens’ long-term issuer and senior unsecured debt ratings at A1 and changed the outlook to stable from negative, the rating agency announced Friday.
The action follows the recent affirmation of Societe Generale (OTC:SCGLY)’s ratings and its outlook change to stable from negative on July 24.
Moody’s also affirmed Ayvens’ short-term issuer ratings at Prime-1 and its senior unsecured Medium-Term Note programme at (P)A1.
For Ayvens Bank N.V., Moody’s affirmed long-term deposit, issuer and senior unsecured debt ratings at A1 and short-term deposit ratings at Prime-1, while changing the outlook to stable from negative.
The rating agency explained that Ayvens’ ratings are largely driven by Societe Generale’s ratings due to the "very high probability of extraordinary support" from the majority shareholder, which holds a 53% stake in Ayvens and considers it strategically important to its mobility business activities.
Ayvens’ A1 long-term issuer and senior unsecured debt ratings reflect its baseline credit assessment (BCA) of baa3, affiliate support from Societe Generale resulting in an adjusted BCA of baa2, three notches of uplift under Moody’s Advanced Loss Given Failure analysis, and one notch of further uplift due to moderate probability of support from the French government.
The stable outlook reflects both Societe Generale’s stable outlook and Moody’s expectation of a stable standalone credit profile at Ayvens.
Moody’s indicated that Ayvens’ BCA could be upgraded if operational risks linked to LeasePlan integration decreased and if prospects of high residual value risk in evolving mobility technologies improved, leading to sustainably higher profitability.
Conversely, the BCA could face downgrade pressure if Ayvens fails to manage residual value risks adequately, experiences deterioration in funding and liquidity profiles, or suffers structural profitability decline.
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