Moody’s downgraded from “B2” to “Caa1” the credit rating on senior debt and long-term deposits of Portugal’s Novo Banco, the bank that inherited the healthy assets of the bankrupt Banco Espírito Santo (BES), according to information released Monday.

This downgrade was made despite five senior debt series being passed on to BES, with Moody’s considering that “the bank’s credit profile is very weak, despite the increase in capital cushions (…) and the benefits of state-guaranteed financing being extended”.

The measure decided by the Bank of Portugal allowed “in net terms, a positive impact for the capital of Novo Banco of about 1985 million euros,” according to the supervisor.

Moody’s will continue to monitor the bank, as impact on the credit rating of Novo Banco of the restructuring plan and the possible outcome of the sale of the bank, which will resume this month, is not known.

The sales process of Novo Banco was postponed in September 2015, after the Bank of Portugal rejected three proposals submitted by Chinese companies Anbang Insurance and Fosun and US investment fund Apollo Global Management. (macauhub/CN/ PT)