Moody's cuts some Riggs ratings

Moody's Investors Service said it changed the ratings of Riggs National Corp., including the subordinated rating to B2 from B1, and its lead bank subsidiary, Riggs Bank NA, including its deposit rating to Ba1 from Baa3.

Moody's left unchanged the ratings of Riggs Capital and Riggs Capital Trust II preferred stock at Caa1. The ratings remain on review, direction uncertain.

Moody's said the downgrade followed the rejection by Riggs National Corp. of the revised terms and conditions put forward by PNC Financial Services Group Inc. for it to proceed with the merger agreement announced in July 2004. Moody's also noted the increased level of legal and other expenses Riggs incurred in the fourth quarter of 2004.

While some of these expenses were of a non-recurring nature, Moody's believes such expenses will continue to weigh on the company's core profitability over the foreseeable future.

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