Fitch cuts Colonial BancGroup to D

Fitch Ratings said its downgraded Colonial BancGroup, Inc.'s long- and short-term issuer default ratings to D from C and individual rating to F from E following the placing of Colonial Bank into receivership.

The C/RR6 subordinated debt ratings of Colonial BancGroup and Colonial Bank and the C/RR6 preferred stock of Colonial Capital Trust IV and CBG Florida REIT are unaffected.

Following the bank's closure, the Federal Deposit Insurance Corp. will sell the majority of Colonial's deposits to BB&T Corp. It is anticipated that Colonial BancGroup will file for bankruptcy in the very near future, the agency said, adding that BB&T is not assuming any bank-level subordinated debt or holding company obligations.

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