Fitch cuts Bank of America preferreds

Fitch Ratings said it has downgraded various ratings of Bank of America Corp. and subsidiaries, reflecting concerns surrounding the headwinds that the company is facing over the near- to intermediate-term, both with regard to asset quality and capital needs.

Following the Supervisory Capital Assessment Program conducted by U.S. bank supervisors, Bank of America is required to raise an additional $33.9 billion in common equity by early November 2009, a daunting task in any environment, the agency added.

Considering the meaningful uncertainty which surrounds both near-term credit costs and market conditions, Fitch said it believes there is a heightened level of execution risk in meeting the capital requirement, which, in turn, indicates a heightened level of performance risk for the various classes of hybrid capital securities.

Affected ratings include Bank of America's preferred stock to B from BB; Merrill Lynch & Co. Inc.'s preferred stock to B from BB; and BankAmerica's preferred stock to B from BB.

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