Fitch downgrades SunTrust

Fitch Ratings said it downgraded SunTrust Banks, Inc.'s long-term issuer default rating and senior debt to BBB+ from A-, its subordinated debt to BBB from BBB+, its preferred stock to BBB- from BBB and its short-term issuer default rating and debt to F2 from F1.

The agency also downgraded SunTrust Bank's senior debt to BBB+ from A-, subordinated debt to BBB from BBB+ and short-term debt to F2 from F1 and the preferred stock of SunTrust Capital I, III, VII and IX, SunTrust Preferred Capital I and National Commerce Capital Trust I to BBB- from BBB.

Finally, Fitch affirmed the long-term debt guaranteed under the Federal Deposit Insurance Corp.'s Temporary Liquidity Guarantee Program at AAA, the short-term debt guaranteed under the program at F1+, the individual rating at C, support rating at 5 and support floor at "No Floor."

The outlook is stable.

The downgrade reflects continued credit stress and the expectation that SunTrust will continue to be hampered by elevated credit costs over the intermediate term, making it difficult for it to return to profitability in 2010 and possibly into 2011, Fitch said. The agency believes that SunTrust's persistently weak credit and performance metrics do not compare well to its peers and are not commensurate with an A- rated company.

The stable outlook reflects Fitch's belief that SunTrust has sufficient financial resources, in terms of capital, reserves and pre-provision net revenue, relative to its current ratings to absorb the expected higher loss rates in the portfolio over the near to intermediate term.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.