Fitch Affirms Ratings on Goldman Sachs (GS); Outlook Raised to Stable

April 8, 2011 12:35 PM EDT
Fitch affirmed Goldman Sachs' (NYSE: GS) A+ long-term Issuer Default Rating and also revised the outlook from Negative to Stable.

The ratings agency attributed the affirmation to "resilience throughout the crisis and the firm's de-levered balance sheet, strong liquidity profile, proven earnings power and strong franchise despite some of the ongoing regulatory uncertainties and somewhat difficult operating environment. In response to regulatory changes and to reduce risk, the firm has scaled back or eliminated certain proprietary trading activities. Goldman has maintained its extensive sales and trading platform, and leading advisory and underwriting positions in the global markets, while positioning itself well for potential future stresses."

As for the more optimistic outlook, Fitch said a Stable outlook "incorporates the resolution of some of the legal and regulatory matters that precipitated the Negative Outlook on May 2, 2010. The most significant resolution since May 2010 was the $550 million settlement with the SEC regarding the ABACUS transaction in which Goldman acted as the underwriter."

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