S&P cuts Marshall & Ilsley

Standard & Poor's said it lowered the counterparty credit rating on Marshall & Ilsley Corp. to BB+/B from BBB-/A-3, along with the counterparty credit ratings on its primary banking subsidiary, M&I Marshall & Ilsley Bank, to BBB-/A-3 from BBB/A-2.

The outlook remains negative.

The downgrade largely results from a view that net losses could persist at M&I over the next several quarters, despite some signs of improved loan performance, S&P said.

These losses will further pressure capitalization levels, the agency said.

S&P also said it expects loan performance to remain weak throughout 2011 given the bank's relatively high commercial real estate and construction loan exposures.

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