Moody’s: Commercial Bank Uncertainties Ended
Ratings agency Moody’s said the acquisition of Bermuda Commercial Bank [BCB] by Permanent Investments Limited ended the “lingering uncertainties” over the ultimate ownership of the bank.
Permanent has acquired all BCB’s common shares previously held by its largest shareholder, First Curacao International Bank N.V. [FCIB]. These shares represent 54% of BCB’s issued and outstanding shares. Permanent has also purchased all of FCIB’s outstanding options in BCB.
In addition, Permanent has also agreed to make a cash offer to acquire all the remaining issued and outstanding common shares of BCB at a 27% premium over the last traded price prior to the announcement of the acquisition on April 15, 2010. All matters have been approved by the Bermuda Monetary Authority,
However, the rating agency will seek to clarify the new owner’s views regarding the bank’s future operating and financial profile, including its capitalization and investment guidelines. This will influence the bank’s future rating direction.
The bank’s strategy has focused on providing banking services to the international business community in Bermuda. Its balance sheet is highly liquid with the bulk of its assets being held in cash and deposits with banks. The bank has no debt and is very highly capitalized. Therefore, there is limited near term risk to depositors.
Moody’s last rating action on Bermuda Commercial Bank Limited was on January 30, 2008 when Moody’s confirmed the bank’s ratings at D+ for financial strength and Baa3 and Prime-3 for long- and short-term deposits with a stable outlook.
Moody’s Investors Service performs financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized ratings scale. The company has a 40% share in the world credit rating market, as does its main rival, Standard & Poor’s
