Moody's may cut Wachovia

Moody's Investors Service said it placed under review for downgrade Wachovia Corp.'s senior debt rating of Aa3. The agency affirmed the Prime-1 short-term ratings.

The agency said the possible downgrade follows the announcement by Wachovia of an expected second quarter net loss of up to $2.8 billion primarily driven by a substantial loan loss provision largely associated with its $115 billion pick-a-pay portfolio.

"Initially, we thought the lifetime losses on this book would be around $8.4 billion, but the review will update and possibly increase our loss expectations," Moody's senior vice president Sean Jones said in a written statement.

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