OREANDA-NEWS. Fitch Ratings has today downgraded Greece-based National Bank of Greece S.A. (NBG), Piraeus Bank, S.A. (Piraeus), Eurobank Ergasias S.A. (Eurobank) and Alpha Bank AE's (Alpha) Long- and Short-term Issuer Default Ratings (IDRs) to 'RD' from 'CCC' and 'C', respectively. Fitch has also downgraded these banks' Viability Ratings (VRs) to 'f' from 'ccc'. A full list of rating actions is at the end of this rating action commentary.

KEY RATING DRIVERS

IDRS AND SENIOR DEBT RATINGS
The IDR downgrades follow the announcement by the Greek authorities on 28 June 2015 to impose extended bank holidays and capital controls, mainly including restrictions on deposit withdrawals in Greece, which Fitch views as a restricted default ('RD'), because the deposit restrictions affect a material part of the banks' senior obligations.

The banks' senior unsecured long-term debt ratings have been downgraded to 'C'/'RR6' from 'CCC'/'RR4'. The ratings reflect exceptionally high levels of credit risk, because of the imposition of capital controls as well as poor recovery prospects in the event of the default on senior debt obligations, due to very weak asset quality and high levels of preferred liabilities and asset encumbrance.

VRS
The downgrade of NBG's, Piraeus', Eurobank's and Alpha's VR to 'f' from 'ccc' reflects Fitch's view that these banks have failed and would have defaulted had capital controls not been imposed, given the high rates of ongoing deposit withdrawal and the ECB's decision on 28 June 2015 not to raise the Bank of Greece's Emergency Liquidity Assistance (ELA) ceiling.

SUPPORT RATING AND SUPPORT RATING FLOOR
Greek banks' Support Rating of '5' and SRF of 'No Floor' highlight our view that support from the state cannot be relied upon, mainly given the limited resources at Greece's disposal.

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Greek banks' subordinated debt and other hybrid capital have been affirmed at 'C'/'RR6' and reflect exceptionally high levels of credit risk, including poor recovery prospects. Hybrid capital is currently not performing.

RATING SENSITIVITIES

IDRS, VRs AND DEBT RATINGS
These banks' IDRs, VRs and senior and subordinated debt ratings are unlikely to be upgraded until capital controls are materially eased. Recovery Ratings are sensitive to the overall approach taken by the authorities to address the banking system's challenges, including any resolution tools that might be applied and the valuation and availability of free assets. Hybrid ratings would need to become performing again for there to be any possibility of an upgrade.

SUPPORT RATING AND SUPPORT RATING FLOOR
The banks SRs and SRFs are unlikely to change, given Greece's limited capacity to support its banks.

The rating actions are as follows:

NBG:
Long-term IDR: downgraded to 'RD' from 'CCC'
Short-term IDR: downgraded to 'RD' from 'C'
VR: downgraded to 'f' from 'ccc'
Support Rating: affirmed at '5'
SRF: affirmed at 'No Floor'
Senior notes: downgraded to 'C'/'RR6' from 'CCC'/'RR4'
Short-term senior notes: affirmed at 'C'
Hybrid capital: affirmed at 'C'/'RR6'

NBG Finance plc:
Long-term senior unsecured debt rating: downgraded to 'C'/'RR6' from 'CCC'/'RR4'
Short-term senior unsecured debt rating: affirmed at 'C'

Piraeus Bank:
Long-term IDR: downgraded to 'RD' from 'CCC'
Short-term IDR: downgraded to 'RD' from 'C'
VR: downgraded to 'f' from 'ccc'
Support Rating: affirmed at '5'
SRF: affirmed at 'No Floor'
Long-term senior unsecured debt rating: downgraded to 'C'/'RR6' from 'CCC'/'RR4'
Short-term senior unsecured debt rating: affirmed at 'C'
Commercial paper: affirmed at 'C'

Piraeus Group Finance PLC:
Long-term senior unsecured debt rating: downgraded to 'C'/'RR6' from 'CCC'/'RR4'
Short-term senior unsecured debt rating: affirmed at 'C'

Alpha Bank:
Long-term IDR: downgraded to 'RD' from 'CCC'
Short-term IDR: downgraded to 'RD' from 'C'
VR: downgraded to 'f' from 'ccc'
Support Rating: affirmed at '5'
SRF: affirmed at 'No Floor'
Long-term senior unsecured debt rating: downgraded to 'C'/'RR6' from 'CCC'/'RR4'
Short-term senior unsecured debt rating: affirmed at 'C'
Commercial paper: affirmed at 'C'

Market-linked senior notes: downgraded to 'Cemr'/'RR6' from 'CCCemr'/'RR4'
Hybrid capital: affirmed at 'C'/'RR6'

Alpha Credit Group PLC:
Long-term senior unsecured debt rating: downgraded to 'C'/'RR6' from 'CCC'/'RR4'
Short-term senior unsecured debt rating: affirmed at 'C'
Subordinated notes: affirmed at 'C'/'RR6'

Eurobank:
Long-term IDR: downgraded to 'RD' from 'CCC'
Short-term IDR: downgraded to 'RD' from 'C'
VR: downgraded to 'f' from 'ccc'
Support Rating: affirmed at '5'
SRF: affirmed at 'No Floor'
Senior notes: downgraded to 'C'/'RR6' from 'CCC'/'RR4'
Short-term senior notes: affirmed at 'C'
Market-linked senior notes: downgraded to 'Cemr'/'RR6' from 'CCCemr'/'RR4'
Commercial paper: affirmed at 'C'
Subordinated notes: affirmed at 'C'/'RR6'
Hybrid capital: affirmed at 'C'/'RR6'

ERB Hellas PLC:
Long-term senior unsecured debt rating: downgraded to 'C'/'RR6' from 'CCC'/'RR4'
Short-term senior unsecured debt rating: affirmed at 'C'

ERB Hellas (Cayman Islands) Ltd.:
Long-term senior unsecured debt rating: downgraded to 'C'/'RR6' from 'CCC'/'RR6'
Short-term senior unsecured debt rating: affirmed at 'C'