MyState Bank has broken ties with Standard and Poor’s following the latest credit rating issued by the market analyst.
The Tasmanian bank has announced that it will no longer require the services of Standard and Poor’s (S&P) and has requested for the withdrawal of all its credit ratings.
Last week, S&P Global lowered MyState Bank’s short-term and long-term issuer credit ratings. The bank’s $2 billion debt instrument program also had its senior component ratings drop from BBB/A-2 to BBB-/A-3.
S&P also lowered the Tier 2 subordinated notes rating from BB+ to BB.
MyState Limited’s chief executive officer and managing director, Melos Sulicich, cited the recent credit rating and funding arrangements as the reason for the bank’s decision to cut ties.
“Given the current credit ratings applied to MyState Bank and the nature of funding both now and into the future, the rating from S&P was no longer considered necessary,” Mr Sulicich said.
Following the lender’s announcement, S&P Global withdrew the ratings, despite noting in a report that the bank’s outlook would be “stable” for the next few years.
“At the time of the withdrawal, the outlook on the ratings was stable, reflecting our expectations that the MyState Group will maintain its risk-adjusted capital (RAC) ratio between 10 per cent and 15 per cent while maintaining its sound underlying performance and good asset quality,” the report read.
“MyState Group’s RAC ratio as of June 30, 2017, was 12.6 per cent, and we now expect it to remain broadly unchanged in the next two years.”
MyState Bank will, however, retain its Baa1/P2 rating from Moody’s, which applies to the outstanding short-term debt instruments and the existing medium-term note program.