Fitch Ratings has today affirmed Euroclear Bank’s ratings at Long-term ‘AA+’, Short-term ‘F1+’ and Support ‘1’. The Outlook on the Long-term rating is Stable.
The affirmation follows Euroclear’s announcement that its corporate restructuring has been completed and has received approvals from all the regulatory authorities supervising the different entities of the Euroclear group. To accommodate Euroclear’s business model, including the implementation of a single processing and settlement platform across the different entities of the group, Euroclear Bank has as of 1 January 2005 become a sister company of the CSDs it had previously owned. The latter are Euroclear France, Euroclear Nederland and CRESTCo (U.K.).
The reorganisation provides more transparency to the market on the group’s corporate structure. In particular, the CSDs are no longer subsidiaries of Euroclear Bank, addressing a potential market concern that Euroclear Bank would enjoy a preferential status over the CSDs in terms of cross subsidies. In addition, this allows greater strategic flexibility if other CSDs wish to join the group.
Fitch said its renewed ratings reflect Euroclear Bank’s strong position in the international settlement industry, its very low risk profile and its sound financial structure. Additionally, the ratings take into account the fact that Euroclear Bank is an integral part of the Euroclear group.