S&P Applies New Ratings Criteria to Banks; Cuts BofA, Citi, Goldman, Wells Fargo, JPMorgan, More

Bank stocks are selling off after hours Tuesday as credit ratings agency S&P applied new ratings criteria to the group. The Financial Select Sector SPDR ETF (NYSE: XLF) is down about 1 percent in the post-market session. US futures are also moving on the news: the Dow is now indicated about 60 points lower, Nasdaq futures are down about 10 and S&P futures are off about 7.

Standard & Poor's Ratings Services today said it reviewed its ratings on 37 of the largest financial institutions in the world by applying its new ratings criteria for banks, which were published on Nov. 9, 2011. See the Ratings List for the ratings on these banks, their core and highly strategic subsidiaries, and other subsidiaries that we took rating actions on as a result of applying our new criteria to their parents. We will review all ratings that we placed on CreditWatch within 90 days. Ratings on CreditWatch are designated as Watch Neg or Watch Pos in the list below.

We will publish individual research updates on the bank groups identified below, including a list of ratings on affiliated entities, as well as the ratings by debt type--senior, subordinated, junior subordinated, and preferred stock. The research updates will be available at www.standardandpoors.com/AI4FI and on RatingsDirect on the Global Credit Portal. Ratings on specific issues will be available on RatingsDirect on the Global Credit Portal and www.standardandpoors.com.

Standard & Poor's will be hosting two teleconferences to discuss the application of the newly revised criteria and the related ratings actions. See the teleconference information below the Ratings List.

RELATED CRITERIA AND RESEARCH
-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011
-- Group Rating Methodology And Assumptions, Nov. 9, 2011
-- Banking Industry Country Risk Assessment Methodology And Assumptions, Nov. 9, 2011
-- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011

Below are some individual highlights from the changes:

• BofA (NYSE: BAC) from A to A-; outlook Negative
  
• Citi (NYSE: C) from A to A-; Negative
  
• Goldman (NYSE: GS) from A to A-; Negative
  
• Wells Fargo (NYSE: WFC) from AA- to A+; Negative
  
• Morgan Stanley (NYSE: MS) from A to A- Negative
  
• JPMorgan (NYSE: JPM) from A+ to A; outlook Stable
  
• Bank of New York Mellon (NYSE: BK) from AA- to A+; outlook Negative
  
• HSBC (NYSE: HBC) from AA- to A+; outlook Stable
  
• Lloyd's (NYSE: LYG) from A to A-; outlook Stable
  
• UBS (NYSE: UBS) from A+ to A; outlook to Negative
  
• Barclays (NYSE: BCS) from A+ to A; outlook Stable
  
• RBS (NYSE: RBS) from A to A-; outlook Stable

Notably, credit ratings on State Street (NYSE: STT), Credit Suisse (NYSE: CS) and Deutsche Bank (NYSE: DB) were affirmed. These bank's outlooks were revised to Negative.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Midday movers: Morgan Stanley, UnitedHealth rise; Tesla falls
• Wells Fargo Upgrades Kroger (KR) to Overweight, 'Building Catalysts Point to Attractive Stock Setup'
• Marex Group (MRX) Launches 15.38M Share IPO