S&P lowers rating on Popular Inc. by 2 notches (AP)
Wed, 10 Jun 2009 19:51:07 Etc/GM
The long-term counterparty credit rating was lowered to "BB-" from "BB+" and the rating on the company's preferred shares was lowered to "C" from "B-."
The short-term counterparty credit rating was affirmed at "B."
The rating on subsidiary Banco Popular de Puerto Rico was lowered to "BB+/B" from "BBB-/A-3." The outlooks are negative.
The rating downgrade followed Popular's decision to suspend dividends on common stock and on its series A and series B preferred stock. Popular also plans to offer common stock in exchange for its series A and series B preferred and its trust-preferred securities.
In a note to investors, S&P analyst Robert Hansen wrote the moves reflect "increasing pressures on the company's capital position, operating performance, and liquidity."
The downgrade came on the same day that Sterne Agee analyst Adam Barkstrom upgraded Popular's shares to "Neutral" from "Sell," saying that the exchange offer will boost the company's book value.
On Tuesday, Moody's Investor Service cut Banco Popular de Puerto Rico's financial strength rating to "D+" from "C," and the bank's long-term deposits to "Baa2" from "A3."
Popular shares rose 20 cents, or 8.2 percent, to $2.65 in afternoon trading.
source: http://biz.yahoo.com/ap/090610/us_popular_standard_poor_s.html?.v=1