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S&p Lowers A&l's Long-term Credit But Outlook Is Stable

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Standard & Poor's says although it's lowered Alliance & Leicester's long-term credit rating, changes to the UK bank's funding arrangements mean its off CreditWatch and the outlook is stable.

Its long-term counterparty credit rating has been lowered by S&P from A+ to A.

But the bank has been removed from the credit rating agency's CreditWatch where its long-term rating had been placed with negative implications on January 31.

S&P has also affirmed A&L's short-term counterparty credit rating at A-1.

Nick Hill, credit analyst at S&P, says: "This rating action follows A&L's full-year results for 2007 and outlook for 2008. As a result of difficult funding conditions, A&L has taken out various secured borrowing facilities with a range of banks."

S&P says these actions are prudent and have bolstered A&L's liquidity and funding profile, while reducing its historical reliance on short-term funding.

Hill adds: "Overall, we consider that A&L's new funding arrangements, fair degree of diversity, and its strong asset quality should support the 'A' rating."

It warns though that A&L could still get a lower rating if further large impairments on Treasury assets of a similar magnitude to those of 2007 recurred in 2008, or if there were to be a sharp weakening in the UK economy or housing markets.

It says in the current market environment an upgrade is unlikely.

So A- then

Edited by Ash4781

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S&P are a dead good ratings agency :P

I cut and pasted this from the big picture blog (http://bigpicture.typepad.com):

"Standard & Poor's cut some of its credit ratings on investment bank Bear Stearns Friday following news of the bank's cash crisis and emergency bailout.

S&P cut its long-term counterparty rating on Bear Stearns to "BBB" from "A" and its short-term rating to "A-3" from "A-1."

S&P said Bear Stearns' need for temporary financing to continue operating normally led to the downgrade. Earlier Friday, Bear Stearns said it is receiving a financing line from JPMorgan Chase that is secured by the Federal Reserve Bank of New York.

The agency also placed the bank's long- and short-term ratings on negative watch, meaning they could be downgraded in the next three months.

WTF is going on at S&P ? Are these guys smoking the chronic? "


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Guest Shedfish

13th March 2008

End in sight for subprime losses, says S&P

14th March 2008

Fed leads Bear Stearns rescue

The credit crisis on Friday engulfed one of Wall Street’s most important investment banks as the Federal Reserve and JPMorgan Chase combined to provide emergency finance for 85-year-old Bear Stearns and prevent further upheaval in global markets.

The decision by the monetary authorities to throw a temporary lifeline to Bear followed a night of deliberations involving regulators, led by Timothy Geithner, president of the New York Fed, and came after Bear’s shares plunged and its access to overnight funding dramatically diminished. It is likely to pave the way for a sale or liquidation of the company in the coming weeks. However, people close to the situation said Bear was also talking to strategic investors about a capital injection.

sub-standard and p1ss-poor

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  • 297 Brexit, House prices and Summer 2020

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