S&P boosts ratings on Leumi, Hapoalim [pg. 17]

According to S&P, the government's bailout of the banking system in the early 1980s was a clear sign of the ability and willingness of the BoI to take steps aimed at avoiding a wider banking crisis.

March 1, 2006 08:08
1 minute read.
standard poors logo 88

standard poors logo 88. (photo credit: )


Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief


Standard & Poor's raised its long-term credit ratings on Bank Leumi le-Israel and Bank Hapoalim on Tuesday, after placing greater emphasis on potential government support in evaluating the banks' credit worthiness. The ratings agency also affirmed its "A-2" short-term ratings for the two banks. "The upgrades reflect our opinion that the government of the State of Israel would likely provide extraordinary assistance to banks vital to the country's [financial] system in the event that these banks encountered distress, S&P credit analyst Magar Kouyoumdjian said in a report. According to S&P, the government's bailout of the banking system in the early 1980s was a clear sign of the ability and willingness of the Bank of Israel to take steps aimed at avoiding a wider banking crisis. Separately, S&P affirmed its "BBB+" long-term and "A-2 short-term ratings on telecommunications company Bezeq Ltd. and removed the "CreditWatch negative" designation it had carried on the company since May 10. A negative creditwatch rating meant the ratings were subject to review with negative implications. Nevertheless, the firm's outlook for Bezeq remained negative. "Bezeq's financial flexibility has reclined as a result of the new, indebted controlling shareholder's aggressive financial policy," said S&P credit analyst Simon Redmond. "This is being implemented at a time when the core fixed-line business faces intensifying competitive pressures." The firm also said an unmitigated deterioration in operating performance, particularly in its fixed-line business, which contributes 60 percent of the company's earnings before interest, taxes, depreciation and amortization, would put pressure on the ratings, especially if cash flow weakened. "In addition, there is a near-term risk of evolution in Bezeq's ownership and overall capital structure," Redmond said. "In any case, the Ap-Sab-Ar Holdings consortium is expected to exit or evolve, most likely in the medium-term." S&P said, however, that strong operating performance, resulting in both strengthening cashflows and coverage metrics, could lead to the outlook for Bezeq being revised to stable over the medium-term, in the absence of other negative developments.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection