Fitch cuts Sterling

Fitch Ratings said it has downgraded Sterling Financial Corp.'s ratings as follows: long-term issuer default rating to CCC from BB; and short-term issuer default rating to C from B.

The agency said that the rating actions follow Sterling's announcement that it will defer its next scheduled interest payments on $245.3 million of junior subordinated debt and $303 million of class A preferred stock issued to the U.S. Treasury under its Capital Purchase Program.

According to Fitch, Sterling has been come under continued pressure from a severe escalation of nonperforming loans, largely emanating from its residential construction loan book.

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