Today Bear Stearns, Tomorrow, Washington Mutual?
WaMu debt borders Junk... Today, due to the "the rapid deterioration of the residential housing sector in the first quarter."
Already troubled WaMu's senior unsecured debt rating was cut by Moody's from Baa2 down to Baa3, which is the lowest investment grade.
Its overall bank financial strength of C- and short term rating of prime-2 were "affirmed."
According to the WSJ: Moody's believes that remaining lifetime losses on residential-mortgage loans
will be higher than previously expected and that WaMu will need to set aside more than $12 billion for potential losses.
It added the firm's 2008 net loss "could eliminate the company's approximately $6 billion capital cushion above regulatory well-capitalized minimums."
Moody's negative outlook reflects "uncertainty around the company's ability to replenish capital" going forward.
The Nattering One muses... Any more downgrades will take WaMu to Junk status and that...
will bar many holders from being able to hold their debt or equity instruments. Can you say fire sale? I can.
And just think, as we reported in these pages, Wells Fargo is still suffering from major indigestion after swallowing a nice chunk of WaMu's book.
Already troubled WaMu's senior unsecured debt rating was cut by Moody's from Baa2 down to Baa3, which is the lowest investment grade.
Its overall bank financial strength of C- and short term rating of prime-2 were "affirmed."
According to the WSJ: Moody's believes that remaining lifetime losses on residential-mortgage loans
will be higher than previously expected and that WaMu will need to set aside more than $12 billion for potential losses.
It added the firm's 2008 net loss "could eliminate the company's approximately $6 billion capital cushion above regulatory well-capitalized minimums."
Moody's negative outlook reflects "uncertainty around the company's ability to replenish capital" going forward.
The Nattering One muses... Any more downgrades will take WaMu to Junk status and that...
will bar many holders from being able to hold their debt or equity instruments. Can you say fire sale? I can.
And just think, as we reported in these pages, Wells Fargo is still suffering from major indigestion after swallowing a nice chunk of WaMu's book.
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