S&P lifts E*Trade to positive

Standard & Poor's said it affirmed E*Trade Financial Corp.'s B- counterparty credit rating and B- senior unsecured debt ratings.

The agency also said it affirmed E*Trade Bank's B+/B counterparty credit ratings and certificate of deposit ratings.

S&P also said it revised the outlook to positive from stable.

The outlook revision reflects the regulatory approval that E*Trade Bank received from the Office of the Comptroller of the Currency to upstream $100 million of dividends in third-quarter 2013 to the holding company, the agency said.

This approval reflects a vote of confidence from regulators that the company has made significant progress on its strategy and capital plan, said Charles Rauch, an S&P analyst.

E*Trade intends to seek approval to upstream $100 million of dividends per quarter, Rauch added. If the holding company receives dividends for several quarters, it will be in a stronger financial position to pay down outstanding debt and potentially achieve a higher rating, S&P said.

The ratings reflect the company's well-recognized brand name, but weak market position in the cyclical retail-brokerage space, the agency said.

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