In an unsurprising move, Moody's has downgraded subordinated debt issued by ANZ (ASX: ANZ), Commonwealth Bank (ASX: CBA), National Australia Bank (ASX: NAB) and Westpac (ASX: WBC).
All of these banks had their ratings lowered by two notches. Other banks were also affected to a lesser extent.
The Moody's move follows a similar downgrade by S&P earlier this year. It has to be emphasised that core ratings remain as before and the downgrades only apply to subordinated debt, which ranks after other types of debt in the event of company failure.
Moody's analyst Patrick Winsbury noted there was a growing trend of "selectively imposing losses" on investors in the junior levels of debt. The new downgrades reflected this.
The downgrades will have a minor impact on bank funding costs and no impact on the AA rating enjoyed by the major Aussie banks, but they do serve as a reminder that GFC repercussions may be with us for some time to come.
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Motley Fool contributor Peter Andersen does not own shares in any companies mentioned.
