Fitch lowers BankUnited

Fitch Ratings said it downgraded BankUnited Financial Corp.'s long-term issuer default rating to CCC from BB-, senior debt to C/RR6 from BB, short-term issuer default rating to C from B and individual rating to E from D.

The agency also downgraded BankUnited FSB's long-term issuer default rating to CCC+ from BB, short-term issuer default rating to C from B, individual rating to E from D and the preferred stock of BankUnited Statutory Trust VIII, IX, XI, XII and BUFC Statutory Trust VII, X to C/RR6 from B-.

The 5 support rating and "No Floor" support floor of BankUnited Financial and BankUnited are unchanged.

The ratings were placed on Rating Watch negative.

The agency said the downgrade reflects recent events that have adversely affected the company's credit profile: on Sept. 19, BankUnited Financial announced the deferral of payments on trust preferred securities and that it agreed to a Cease and Desist Order with the Office of Thrift Supervision. The order cited unsafe and unsound practices leading to a significant rise in delinquencies and defaults in its payment option adjustable-rate mortgage portfolio.

Fitch said the regulatory action significantly weakens the liquidity profile of the holding company as the regulators restrict payments from the bank to the holding company.

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