Tuesday, September 16, 2008

Errrrm… Kaboom?

WaMu ratings downgraded to ‘junk’

Washington Mutual, the largest US savings and loan institution, has had its credit ratings cut to below investment grade. Can anyone get in and post the detail of this article for people to read? You require a logon and mine has expired.

Posted by beartil2010 @ 01:38 PM (840 views)
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5 thoughts on “Errrrm… Kaboom?

  • Washington Mutual, the largest US savings and loan institution, has had its credit ratings cut to below investment grade.

    Late on Monday, rating agency Standard & Poor’s cut WaMu’s ratings to “junk” status, citing the bank’s exposure to bad mortgage debt and its reduced financing flexibility in weak markets.

    EDITOR’S CHOICE
    Full coverage: Crisis on Wall Street – Sep-12

    Lex: AIG – Sep-16

    Lex: Pouring oil on the water – Sep-16

    Video: Peter Thal Larsen on Barclays’ return to the Lehman fray – Sep-05

    Downgrades deepen AIG woes – Sep-16

    Stocks sink amid Wall St crisis – Sep-16

    On a more positive note, S&P said it recognised that the liquidity position in WaMu’s holding company was “currently solidly positioned to meet all of its fixed obligations through 2010, and the bank is operating with adequate capital positions from a regulatory perspective and has demonstrated funding resilience as the deposit franchise has remained stable”.

    The rating agency cut WaMu’s holding company’s senior debt rating by three notches to double B minus from triple-B minus. It also cut the senior and subordinated ratings for WaMu Bank by one notch from triple-B to triple-B minus.

    WaMu’s outlook remained “negative”, S&P said.

    Its views assumed an improvement in earnings for the second half of 2008, but a loss for the full year.

    One London-based credit analyst said S&P’s major concern, as was Moody’s last week, was the banking group’s financial flexibility. He said he could not share S&P’s optimistic view that WaMu would see lower losses later in the year.

    WaMu’s share price fell 18 per cent on Monday amid fears the bank lacks sufficient liquidity and capital to survive the credit crisis and may struggle to find a buyer amid the financial turmoil.

    WaMu, which has $310bn in assets and $143bn in customer deposits, has been hit by short-selling, pushing the beleaguered savings bank’s stock price to 19-year lows and fuelling speculation that it could be the next financial institution to need either a government bail-out or a hastily engineered sale.

    Copyright The Financial Times Limited 2008

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  • planning4acrash says:

    Looks like we at HPC have been EXTREMELY conservative in our analysis to date!

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  • Great business for the big-boys like BoA, as they’re getting firesale prices on these assets. Question is how deep will all of this go, particularly with Alt-A, Jumbo, Credit Card, Auto, and Corporate Debts. And with the FTSE below 5000! No one wanted to mention financial Armageddon, but it’s hard to see how this scenario now won’t pan out.

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  • Lots of companies relying on debt financing will go to the wall, and there is massive asset price deflation, while the central banking boys are trying to pump inflationary money everywhere to stop things collapsing.

    Interesting times. Like the old curse – ‘May you live in interesting times’.

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  • wealth transfer

    uh hum

    planned wealth transfer

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