S&P Revises Credit Outlooks On BofA (BAC) and Citi (C) to Negative, Saying No More Free Govenment Handouts
More News related to BAC
- Active equity option families in first 30 minutes of trading: C PALM F BAC
- Goldman Sachs Sees Weaker-Than-Expected Q1 for Banks, But Still Positive for the Year (JPM, BAC, C, MS, JEF)
- Bank of America Launches Local Youth Fitness Initiative Through Two Premier Running Events
- Judge Rejects SEC, Wall Street Attempt To Ease Analyst Curbs
- Citi Strategist Says Financials Will Lag Going Forward (XLF, KBE)
More News related to C
- Citi (C) Reverses Decision to Shrink Home-Lending Business; To Boost Purchases of Mortgages Sold by Other Banks -Bloomberg
- Bove Sees Citi (C) Shares Around $8.50 Within Several Years
- Active equity option families in first 30 minutes of trading: C PALM F BAC
- Goldman Sachs Sees Weaker-Than-Expected Q1 for Banks, But Still Positive for the Year (JPM, BAC, C, MS, JEF)
- IRvoice Beijing Forum 2010 Registration Closes on March 23
S&P lowered its rating outlook on Bank of America (NYSE: BAC) and Citigroup (NYSE: C) today from Stable to Negative, citing uncertainty about the U.S. government's willingness to provide additional extraordinary support in a way that will benefit debt holders.
Analyst John Bartko stated, "We believe markets are beginning to stabilize and the U.S. government is seeking ways to reduce the potential for moral hazard and systemic risk associated with large financial institutions."
Bartko notes that one such effort to reduce these risks is evident in the House bill (H.R. 4173) passed in mid-December that would specifically preclude the government from company-specific bailouts, and would allow it to use public funds to assist in winding down an ailing financial institution, but only if that entity's debt holders incurred losses.
The proposed Financial Crisis Responsibility Fee further underscores the extent to which the political climate affects bondholders of these companies adversely, Bartko explains.
On Bank of America, S&P affirmed all ratings, including its 'A/A-1' counterparty credit rating and ratings on all related entities.
On Citigroup, S&P affirmed its counterparty credit and debt ratings on Citi (A/A-1). The firm raised the ratings on its hybrid capital issues to 'BB-' from 'B+', excluding its preferred stock, which was affirmed at 'C'.
Real-Time Market Moving News Two-Weeks FREE http://www.streetinsider.com/premium_content.php
Related Categories
Analyst CommentsInsiders' Blog
Trader Talk
Stocks Mentioned
-0.26Related Entities
Comments
no more gov handouts
I wasnt aware thast if there is another financial bank crisis that the S and P knows that the government would watch our banks fail. They are uncertain because it is not true and it is a speculative evaluation based on ignorance. The Government would never stand by and watch our financial institutions fail. this uncertainty is basically another S and P evaluation based on krap.
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
Re: no more gov handouts
CrazedTraded on Feb 9, 2010 11:37 AMI think the key is no "free" bailouts. Meaning debt holders will take a haircut if the gov needs to step in again.