S&P: Bulgaria bank turbulence will not change credit rating for now

First Investment Bank AD

02/07/2014 17:04

SOFIA, July 2 (Reuters) - The turbulence in Bulgaria's 
banking system will not change Standard and Poor's sovereign 
credit rating on the country for now, the agency said on 
Wednesday. 
     It based its view on authorities' efforts to prevent the 
contagion from two bank runs in June from spreading. 
    The Bulgarian government has freed up 3.3 billion levs 
($2.30 billion) as a precautionary credit line in state aid to 
banks, following runs on Corporate Commercial Bank (Corpbank) 
 6C9.BB  and First Investment Bank  5F4.BB . The situation has 
since stabilised.  
    S&P had, before the runs started, downgraded Bulgaria's 
sovereign credit rating to one notch above junk, citing 
political turmoil in the Balkan state. The agency also said on 
Wednesday the runs partly reflected a view it took at the time 
of the downgrade that Bulgaria had "weak institutional 
effectiveness and poor governance."  
 
 (Reporting by Matthias Williams; Editing by Janet Lawrence) 
 ((matthias.williams@thomsonreuters.com)(Reuters Messaging: 
matthias.williams.thomsonreuters.com@reuters.net)) 
 
Keywords: BULGARIA CRISIS/S&P