Standard & Poor’s said on Tuesday it has lowered its counterparty credit ratings on Bahrain-based wholesale bank The International Banking Corp. (TIBC) to ‘D/D’ (default) from ‘SD/SD’ (selective default).The rating action follows the July 30 announcement by the Central Bank of Bahrain (CBB) that with immediate effect it has exercised its powers to appoint an administrator to TIBC.
CBB has determined that TIBC, which is owned by troubled Saudi conglomerate Algosaibi Group, has a substantial shortfall of assets compared to its liabilities and comes after S&P downgraded TIBC to ‘SD/SD’ on May 12, following the bank’s default on some of its debt.
In a statement S&P said: ”According to our rating definitions, we assign a ‘D’ rating when we believe that any default will be a general default and that the obligor will fail to pay all or substantially all of its obligations as they come due.
”Our default definition includes payment defaults on both rated and unrated financial obligations.”
An ‘SD’ rating is assigned when it is believed the obligor has selectively defaulted on a specific issue or class of obligations but will continue to meet its payment obligations on other issues or classes of obligations in a timely manner.
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