The grim outlook for the motor industry has prompted a warning
over possible ratings downgrades for two captive finance
Ratings agency Standard & Poor’s placed both Banque PSA
Finance and RCI Banque on “CreditWatch with negative implications”
after “weak auto demand” hit the captives’ respective parents,
Peugeot-Citroën and Renault.
Banque PSA is currently rated at “A-” for long-term and “A-2”
for short-term counterparty credit, while RCI Banque is rated
“BBB+” long-term and “A-2” short-term.
The CreditWatch status of the captives will be resolved within
90 days, S&P said. Analyst Pierre Gautier said that a downgrade
of the parent would not necessarily lead to similar action at the
captive, and that the ratings agency would keep a careful eye on
the extent of the state support offered to Banque PSA and RCI
Banque by the French government.
“If systemic support is sufficient to mitigate funding pressure
from current market conditions, we could envisage widening the
rating differential between [Banque PSA and Peugeot-Citroën, and
RCI Banque and Renault] beyond the current one notch. This would
meet our expectation of external support, given current market
conditions and the bank’s systemic importance,” said S&P.