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German lender PBB’s shares plunge after S&P rating cut
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FRANKFURT (Reuters) – Shares in Deutsche Pfandbriefbank (PBB) dropped 7.5% on Thursday after a cut to its credit rating on concerns over the lender’s exposure to the commercial real estate sector.
FRANKFURT (Reuters) – Shares in Deutsche Pfandbriefbank (PBB) dropped 7.5% on Thursday after a cut to its credit rating on concerns over the lender’s exposure to the commercial real estate sector.
The bank, which is one of Germany’s largest real estate financers, last week sought to reassure investors that it has enough funds to cope with a property slump that has cast a shadow over numerous lenders.
Ratings agency S&P cut PBB’s rating to BBB-/A-3 from BBB/A-2 late on Wednesday with a negative outlook, sending the bank’s shares down 7.5% in Frankfurt on Thursday morning.
“The negative outlook reflects our view that weak (commercial real estate) markets, notably in the U.S., could increase the cost of risk in PBB’s highly concentrated loan portfolio,” S&P said.
PBB declined to comment.
(Reporting by Tom Sims; Editing by Diane Craft, Kirsti Knolle and David Goodman)
A credit rating is an assessment of the creditworthiness of a borrower, indicating the likelihood of default on debt obligations. It is typically expressed as a letter grade.
Commercial real estate refers to properties used exclusively for business purposes, such as office buildings, retail spaces, and industrial facilities, as opposed to residential properties.
A negative outlook in credit ratings indicates that a downgrade in the credit rating may occur in the future, reflecting potential risks or challenges facing the borrower.
A loan portfolio is a collection of loans held by a financial institution, representing the total amount of money lent to borrowers, which can include various types of loans.
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