Countrywide’s Bank Downgraded

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Moody’s Investors Service late Thursday cut the rating on the bank owned by Countrywide Financial Corp. to “D,” or default, because the bank has substantial liquidity issues.


Moody’s said ratings for the Calabasas-based lender’s other financial arms, Countrywide Financial and Countrywide Homes Loans, remained unchanged.


“Although we do consider Countrywide Bank’s ability to fund a significant deposit withdrawal to be high, a substantial decline in deposits would have an impact on the bank’s ability to fund loans and could result in significant franchise impairment,” Moody’s said.


The agency also warned that if the pending acquisition of Countrywide by Bank of America Corp. is not fulfilled, the lender could undergo a “severe” ratings downgrade.


Shares in Countrywide were down 4.3 percent to $6.09 in early trading Friday.

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