S&P lowers Colonial

Standard & Poor's said it lowered its ratings, including the long-term counterparty credit rating, on Colonial BancGroup Inc.

At the same time, the agency said it lowered ratings on the company's subsidiaries, including its primary subsidiary, Colonial Bank, adding that it lowered the long-term senior counterparty ratings on Colonial BancGroup to BBB- from BBB, and on Colonial Bank to BBB from BBB+, while affirming the A-2 short-term rating on the latter.

The outlooks on both companies are negative.

According to S&P, the downgrade reflects the rapid deterioration we've seen in Colonial's commercial real estate portfolio, particularly in its Florida residential construction exposure, and its ongoing concern about the future performance of the portfolio.

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