NEW YORK -- Standard and Poor's Corp. has lowered its ratings on about $18 billion of the debt of France's Credit Lyonnais, citing asset quality.

S&P lowered its rating on Credit Lyonnais' senior debt to A-minus from single A and short-term rating to A-2 from A-1.

The agency also lowered Credit Lyonnais' subordinated debt to BBB-pluS from A-minus and its certificates of deposits to A-minus/A-2 from A/A-1.

1993 Loss

S&P said the downgrades reflect severe asset-quality pressures on Credit Lyonnais and insufficient operating profits.

Despite a move by the bank to transfer around $6.5 billion in real estate-related problem loans to a special government sponsored unit, thereby avoiding heavy provisions, S&P noted, provisions against other risks produced a substantial loss in 1993.

More provisions may be required in the future, S&P predicted, noting that low operating income and capital levels leave the bank with little cushion.

The French banking group is one of the last government-owned financial institutions slated to be privatized in France. S&P said the government and other shareholders may be forced to inject further capital into the bank.

Credit Lyonnais is one of the largest banks in the world with $366 billion of assets, including some $37 billion of U.S. assets.

S&P's downgrade contrasts with a move by Fitch Investors Service, which earlier this week assigned Credit Lyonnais a commercial paper rating of F-1 plus, its highest rating possible.

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