Oct. 3 (Bloomberg) -- Dexia SA, the lender bailed out by France and Belgium in 2008, had the ratings of its three main operating units put on review for downgrade at Moody’s Investors Service on concern the bank is struggling to fund itself.
Moody’s put the long term deposit and debt ratings and the short-term ratings of Dexia Bank Belgium, Dexia Credit Local and Dexia Banque Internationale a Luxembourg on review for downgrade, the ratings company said in a statement today. The stock fell as much as 14 percent, the steepest decline in the 46-member Bloomberg Europe Banks and Financial Services Index.
Dexia posted a 4.03 billion-euro ($5.3 billion) second- quarter loss, the largest in its history as it wrote down its holdings of Greek debt. The Brussels-based lender said on Aug. 4 that U.S. investors’ concern about the European sovereign debt crisis had limited its ability to borrow dollars in the money market. Dexia’s reliance on emergency central bank funding doubled to about 34 billion euros in the second quarter.
“Dexia has experienced further tightening in its access to market funding,” Moody’s said. “Dexia’s collateral postings have increased due to substantial market volatility.”
The stock was down 12 cents, or 8 percent, at 1.33 euros by 10:51 a.m. in Brussels trading, giving the bank a market value of about 2.6 billion euros. The shares have fallen 46 percent this year. Dexia spokesman Benoit Gausseron declined to comment on Moody’s review.
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