Moody's reviews E*Trade

Moody's Investors Service said it placed on review for downgrade the B2 senior credit rating of E*Trade Financial Corp.

The reason for the action is the continuing poor performance of E*Trade Bank's legacy mortgage portfolio, which is severely constraining the company's operating and financial flexibility.

"If on a going forward basis, credit losses remain high or increase, or if revenues are impacted by sharper cyclical declines, the holding company's ability to service and repay debt may be challenged," Alexander Yavorsky, a Moody's vice president said in a statement.

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