BGL BNP Paribas and RBC Dexia Investor Services were placed on Moody’s “review for downgrade” list. That means the credit ratings agency could downgrade the banks’ debt during the next 12 to 18 months. Such a move would likely drive up the financial institutions’ cost of borrowing in the global capital markets.

RBC Dexia, a joint-venture 50 percent owned by Royal Bank of Canada and 50 percent by Dexia Banque Internationale a Luxembourg, currently holds Moody’s fourth-highest AA3 rating on its long-term debt. But the score could potentially fall by two notches, to A2, the agency said in a press statement.

Moody’s cited its placing of RBC on its downgrade review list last week. The Canadian bank--along with several other North American financial institutions--were put under review in light of weak global growth prospects, the agency said.

In addition, “the disposal of DBIL’s 50 percent participation in RBC Dexia is taking more time than initially expected.” Moody’s said it would “assess whether this delayed sale process has affected the joint-venture standalone creditworthiness, particularly its franchise value and risk positioning.”

BGL BNP Paribas, controlled by BNP Paribas, also presently holds a AA3 rating. Moody’s is considering a potential downgrade of one level, to A1.

BNP Paribas--along with 113 European financial institutions--was placed on the agency’s “negative outlook” list on February 15. Moody’s cited lack of progress in resolving the euro zone’s sovereign debt crisis as a primary concern. If parent bank BNP Paribas’s rating is lowered, then it is likely the Luxembourg subsidiary would similarly be downgraded, Moody’s explained.

However, the downward pressure has been significantly mitigated by the fact that “Moody's assumes a very high potential support from the Grand Duchy of Luxembourg” government.

Last week, Moody’s also placed Luxembourg’s Banque et Caisse d'Epargne de l'Etat, which currently holds a top-notch AAA rating, on its “negative outlook” list.