Moody’s on bank’s notes

Moody’s Investors Service has assigned a «Baa1» rating to the 300-million-euro series «A» floating rate non-cumulative guaranteed non-voting preferred securities due to be issued by National Bank of Greece (Jersey) Ltd and guaranteed on a subordinated basis by the parent National Bank of Greece. The preferred securities are perpetual securities and have no fixed redemption date, but are callable after 10 years. The «Baa1» preferred securities rating reflects a two-notch difference from the «A2» foreign currency senior debt rating assigned to National Bank, the credit rating agency said. It pointed to a circular issued by the Bank of Greece regarding hybrid Tier 1 instruments which stated that a bank is only allowed to issue hybrid Tier 1 capital if its upper Tier 1 capital is higher than 5 percent at the time of the issue. The circular also specifies that lower Tier 1 capital should be less than 15 percent of upper Tier 1 capital and that if at any time while hybrid securities are outstanding and upper Tier 1 capital falls below 4 percent, hybrid securities cannot be counted as part of Tier 1 capital. National Bank’s Tier 1 capital adequacy ratio on a group basis totaled 7.4 percent in December 2002, all of which was upper Tier 1, Moody’s said. On a bank-only basis, the ratio was higher at 9.5 percent. Moody’s last week upgraded National Bank’s long-term deposit ratings to «A2» from «A3» and its financial strength rating to «C» from «C minus.» It attributed the upgrade to the improvements in the bank’s broad franchise, domestically and abroad.