WaMu debt downgraded to “junk,” projects $4.5 billion loss reserve

September 11, 2008 by · Leave a Comment
Filed under: Industry News 

Good to hear they have long term funding in place so this hopefully won’t affect them too much.  They did re-affirm their commitment to maintaining there preferred dividend in this volatile market.  Their stock is down to 1990 levels which is not a good sign.

They are still the largest deposit bank in the U.S., it would be ashame to see them lose their independence because of the aggressive lending practices.  With their deposit base they will retain value in any acquisition.

Release:

In a statement, the thrift called the Moody’s downgrade “inconsistent” with its finances, but said it does not expect a “material” impact on borrowings, collateral or margin requirements, or to suspend dividends on its preferred stock.

It also said it has $50 billion of liquidity from “reliable funding sources,” and expects capital to remain “significantly above” regulatory minimums for “well-capitalized” lenders.

Fitch Ratings on Thursday cut its credit rating to “BBB-minus,” the same level as Standard & Poor’s, and those agencies’ lowest investment grades.

The thrift expects to report full results on October 22.

About $3.4 billion of the reserve increase is expected to come from residential mortgages. Credit card reserves would rise by $600 million from the second quarter as the thrift moves securitizations back onto its balance sheet, not because credit quality is deteriorating, a spokesman said.

Fishman is a former chief operating officer of Sovereign Bancorp and chief executive of Brooklyn, New York’s Independence Community Bank Corp.

Click Here to Continue Reading

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!