ANGLO IRISH Bank and Irish Nationwide suffered ratings downgrades on their senior unsecured unguaranteed debt following comments by Minister for Finance Michael Noonan that he wanted to force losses on the bondholders.

International ratings agency Moody’s reduced the bond ratings by one notch to “Caa2” – eight notches into speculative grade or “junk” status – from “Caa1”.

This follows Mr Noonan’s statements confirming increased risks the Government “may yet impose losses on this class of debt, which has so far been protected from burden sharing”, Moody’s said.

There is about €3.2 billion of senior unsecured unguaranteed debt at Anglo, of which about €750 million is due to be repaid in November, and €600 million at Irish Nationwide, which falls due in June 2012. Moody’s left the outlook on the debt as negative, meaning there could be a further downgrade.

This reflected “the continued uncertainty about a potential default on these instruments as well as the potential recovery in such a scenario”, the agency said.

There was no change to their stand-alone bank financial strength, subordinated debt or Government-guaranteed bonds.

The downgrade puts the ratings on the senior unsecured unguaranteed debt at one notch above the institutions’ deposit rating, even though almost all of their deposits were moved to other banks.

Most of Anglo’s deposits were moved to AIB, and Irish Nationwide’s to Irish Life Permanent.

“We do not believe that the Government would look to impose losses on the remaining few deposits,” said the ratings agency.

The Government previously said it would not seek to impose losses on senior bondholders at Anglo and Irish Nationwide unless their bailouts rose above €29.3 billion and €5.4 billion respectively.

Moody’s deems debt on a Caa2 rating as “bonds of poor standing”.

Another ratings agency, Standard and Poor’s, downgraded Anglo’s rating to “CCC” from “CCC+” earlier this week.