Moody's cuts Bank of America

Moody's Investors Service said it has downgraded Bank of America Corp. holding company's long-term senior debt to Baa1 from A2 and its short-term debt to Prime-2 from Prime-1.

The long-term deposit ratings of Bank of America NA were downgraded to A2 from Aa3, while its short-term rating was affirmed at Prime-1. The actions conclude a review for downgrade announced on June 2.

The outlook on the long-term senior ratings remains negative.

Moody's said the downgrades result from a decrease in the probability that the U.S. government would support the bank, if needed. Moody's said it believes that the government is likely to continue to provide some level of support to systemically important financial institutions. However, it is also more likely to allow a large bank to fail should it become financially troubled, as the risks of contagion become less acute.

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