Moody's Downgrades Bank of America and Wells Fargo (9/21/2011)

Déjà vu.. Moody's downgraded BAC and WFC today.
Source: MoneyBlogNewz on Flickr
"Moody's downgrades Bank of America Corp. to Baa1/P-2; Bank of America N.A. to A2, P-1 affirmed

Global Credit Research - 21 Sep 2011

New York, September 21, 2011 -- Moody's Investors Service has downgraded the ratings of Bank of America Corporation's (BAC) holding company to Baa1 from A2 for long-term senior debt and to Prime-2 from Prime-1 for short-term debt. The long-term deposit ratings of Bank of America N.A. (BANA) were downgraded to A2 from Aa3, while BANA's short-term rating was affirmed at Prime-1. The actions conclude a review for downgrade announced on June 2, 2011. The outlook on the long-term senior ratings remains negative.

The downgrades result from a decrease in the probability that the US government would support the bank, if needed. Moody's believes that the government is likely to continue to provide some level of support to systemically important financial institutions. However, it is also more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled, as the risks of contagion become less acute. Moody's is therefore lowering the amount of support it incorporates into Bank of America's ratings to levels reflected prior to the crisis."

Read more: http://www.moodys.com/research/Moodys-downgrades-Bank-of-America-Corp-to-Baa1P-2-Bank--PR_226511

"Moody's downgrades Wells Fargo & Company rating (sr to A2); P-1 affirmed

Global Credit Research - 21 Sep 2011

New York, September 21, 2011 -- Moody's Investors Service downgraded the long-term ratings of Wells Fargo & Company(holding company senior debt to A2 from A1) and of its major subsidiaries including Wells Fargo Bank N.A. (rating on the bank for deposits to Aa3 from Aa2). The actions conclude a review for downgrade announced on June 2, 2011. The outlook on the long-term senior ratings remains negative.

The downgrades result from a decrease in the probability that the US government would support the bank, if needed. Moody's believes that the government is likely to continue to provide some level of support to systemically important financial institutions. However, it is also more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled, as the risks of contagion become less acute. Moody's is therefore lowering the amount of support it incorporates into Wells Fargo's ratings to levels reflected prior to the crisis."

Read more: http://www.moodys.com/research/Moodys-downgrades-Wells-Fargo-Company-rating-sr-to-A2-P--PR_226518

Related Posts

Comments

HTML Comment Box is loading comments...