Fitch Downgrades Uruguay's COFAC to 'D' Following Central Bank Suspension.BUENOS AIRES, Argentina -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has downgraded the long-term foreign currency debt ratings of Uruguay's Cooperativa Nacional de Ahorro y Credito (COFAC COFAC Cooperativa Nacional de Ahorro y Credito (Spanish) ) to 'D' from 'CC'. At the same time, Fitch also downgraded COFAC's national long-term rating to 'D(uy)' from 'B-(uy)'. The Negative Rating Watch on the bank's national ratings has been removed. The downgrade follows the suspension of the entity's operations by the Central Bank of Uruguay The Central Bank of Uruguay (Spanish: Banco Central del Uruguay) is the central bank of Uruguay. See also
BCU Basic Command Unit (British Police) BCU Big Close-Up BCU Bus Controller Unit BCU Battery Coolant Unit BCU Bandwidth Control Unit BCU Beer Cans Unlimited (collectors) ), thereby preventing the timely payment of the institution's obligations. This is the second suspension of the entity's activities by the BCU in the past year. The entity was permitted to open seven days after the first suspension, during which time the bank agreed to a capitalization plan and the imposition of more stringent regulatory requirements. The BCU's recent decision to suspend COFAC's operations was based on the following considerations: --an increasing level of deposit withdrawals facing the institution during the second half of January; --insufficient liquidity to service the current level of deposit withdrawals; --failure to comply with minimum deposit reserve requirements as of Jan. 30; --failure to adopt corrective measures required by the Superintendency Su`per`in`tend´en`cy n. 1. The act of superintending; superintendence. of Financial Institutions to prevent further capital erosion. Fitch had placed the entity's national rating on Rating Watch Negative on Jan. 24; in Fitch's view the entity was unlikely to meet capital targets as set out by the BCU. Fitch will continue to monitor the evolution of this situation over the coming days, including the potential capital injection by Venezuelan development bank, Banco Nacional de Desarrollo de Venezuela, as well as measures taken by the Central Bank to protect depositor's interests. COFAC was the largest credit-cooperative in Uruguay, focused principally on families and small- and medium-sized businesses, with asset and deposit market shares of 1.5% and 1.6% at end-June 2005. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion