U.S. Markets closed

Moody's lowers UBS rating 2 notches

The Associated Press

Moody's Investors Service lowered the rating of UBS AG on Thursday amid a downgrade of some of the world's largest banks.

UBS's long-term debt and deposit rating was bumped down two notches to "A2" from "Aa3" but remained in investment-grade status. The company's outlook is stable.

Moody's said that the banks were downgraded on weaker long-term prospects for growth and profitability. It also expressed concern about banks with significant capital market activities during a time of increased volatility in markets. Moody's said that while UBS relies on capital market revenue to meet shareholder expectation, those operations are less significant for UBS than for some of its peers with similar ratings.

A downgrade usually means that it becomes more costly for banks to raise money by selling debt. Investors demand higher interest for riskier debt, which is what the downgrades represent.

Moody's had said in February that it was considering downgrading the credit ratings of major banks. Thursday's action affected 15 banks and securities firms with global capital markets.