I would call 'BBB' a solid credit rating for a middle tier lender. It is still investment grade. I wouldn't call it 'weak', although others may disagree as 'weak' is a comparative term. A reduction to BBB- would not be catastrophic. Heartland has operated there before.
I remember Jeff being asked at the last AGM what the difference operationally was between 'his' bank and those higher credit rated larger banks, in relation to credit ratings. IIRC Jeff said something like: Very little except the bigger banks loaned on a larger scale. Before Covid-19, both GJe(o)ffs were confident of using retained earnings to fulfill -now delayed- new Reserve Bank capital reserve rules. The fact that Heartland Bank (although not Heartland Holdings) is now banned from paying dividends until this crisis resolves is a kind of enforced capital raising. Whether there will be yet another capital raising, more conventionally structured, is still open to question. Watch the share price rocket if it isn't needed!
Personally I am most worried about the very profitable motor industry loan book. It is true many need a car to get to work or look for a job. But do they need a new car to do this? In tough times it might make sense to get the new car repossessed and use what would have been your new car payments for a couple of months to buy something more modest. We may have to wait until the end of the twelve week wage subsidy to see what happens in this regard. But I think a path still exists for 'no cash issue' at Heartland even if it is IMO a less likely path.
SNOOPY