S&P keeps E*Trade on developing watch

Standard & Poor's said that its ratings on E*Trade Financial Corp. and E*Trade Bank remain on Creditwatch developing, where they were initially placed Dec. 22.

The company was originally placed on Creditwatch Developing pending the outcome of its application with the U.S. Treasury for $800 million of Troubled Asset Relief Program preferred stock, S&P said.

E*Trades application with the U.S. Treasury is still pending and would likely be conditional upon additional capital raising activities, the agency added.

"Our ratings on E*Trade and E*Trade Bank reflect serious challenges they face in servicing a large amount of high-cost debt at the holding company," said S&P credit analyst Charles D. Rauch.

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