Fitch has affirmed Butterfield Bank's debt ratings and said that the impact of the company's capital support of its money-markets funds has been "manageable".

In commentary issued this week, the credit rating agency added that it would "closely monitor the impact of further write-downs on Butterfield's financial flexibility and capital position".

Fitch maintained the bank's long-term issuer default rating at A and its short-term IDR at F1, with a stable outlook.

Butterfield made write-downs totalling $64 million during the second and third quarters, related to backing its triple-A rated money-markets fund and due to the decline in the market value of mortgage-backed investments.

Fitch noted that Butterfield's problems during the turbulent markets of 2008 had been similar to other financial institutions.

"Although BNTB had to provide capital support to its money market fund, the impact to BNTB has been manageable," Fitch commented. "Additionally, the remaining structured investment vehicle (SIV) exposure is predominately bank supported, which should limit further capital support.

"Given the volatility in market prices for some of these securities, Fitch will closely monitor the impact of further write-downs on BNTB's financial flexibility and capital position."

Fitch noted that the bank's capital position had improved during the third quarter with the merger of its funds administration business into the Fulcrum Group. Butterfield owns 40 percent of the resulting Butterfield Fulcrum Group and recorded an extraordinary gain of $115.5 million from the August 2008 deal.

"BNTB's ratings reflect the company's low credit risk, its highly liquid balance sheet, its solid niche in offshore asset management/administration activities, and its strong and consistent earnings record," Fitch commented.