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NYCB Positive Review From Moody's: Good For DePfa, Aareal, Deutsche

FINANCIALS

NYC Bancorp (NYCB US) Moody's upgraded to "review for upgrade" (from review for downgrade) last night after NYCB's capital injection. Good for DePfa, Aareal, Deutsche.


  • NYCB got USD1.05bn capital injection (part equity, part convertible pref) from three investors including Steve Mnuchin’s Liberty Strategic Capital. Assuming pref conversion, this should raise CET1 capital by around 1pp (last reported 9.1%).
  • NYCB is not a Euro credit name but what this does do is marginally reduce the risk of a catastrophic failure and the shock wave that could send through, amongst others, the US CRE office market which is one of the key causes of NYCB’s travails.
  • Alongside DePfa (PBB GY) announcement yesterday it would pay the April AT1 coupon, this is a small positive for Aareal Bank and Deutsche Bank. The latter is only minimally involved with US office but a German bank failure would likely have systemic effects on DB as that country’s largest lender.

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