NZ banks in debt rating cut

Fitch Ratings has cut the debt ratings on government-guaranteed bonds issued by ANZ National Bank and Westpac Banking. File photo

Fitch Ratings cut the debt ratings on government-guaranteed bonds issued by ANZ National Bank and Westpac Banking to reflect last month's downgrade of New Zealand's sovereign rating.

The debt was lowered to AA from AA+, Fitch said in a statement.

The downgrades cover US$2.4 billion of 2012 and 2014 bonds issued by ANZ National and $2.5 billion of Westpac bonds of similar maturities.

New Zealand's foreign-currency debt rating was cut one notch to AA by Fitch last month and the nation was stripped of its AAA local currency rating by Standard & Poor's, which cited high foreign debt and a fiscal position weakened by earthquake costs.

Fitch analyst Andrea Jaehne told APNZ the downgrade of the banks' government guaranteed debt was a "mechanical" reaction to Fitch's downgrade of New Zealand's sovereign debt rating last month.

She said the banks' other ratings, relating to their own stand-alone risk, remained unchanged.

- with APNZ