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Moody's Cuts WaMu Credit Rating
Friday March 14, 6:37 PM EDT
SEATTLE (AP) — Moody's Investors Service cut Washington Mutual Inc.'s credit rating Friday and said the country's largest savings and loan will need at least $4 billion more than it expected to cover bad mortgages in 2008.
Investors sent WaMu's shares down $1.54, or 12.7 percent, to close at $10.59 Friday.
Moody's said its action reflects a "rapid deterioration" of the housing market in the first few months of the year, echoing the rationale behind another rate cut by Standard & Poor's a week ago.
WaMu has estimated it will sock away up to $8 billion this year to account for borrowers who can't afford mortgage payments. Moodys' upped its own estimate for loan-loss provisioning to more than $12 billion Friday.
Resulting fiscal-year losses could eliminate the cash cushion that keeps WaMu in compliance with regulations, Moody's said in a news release.
http://finance.myway.com/jsp/nw/nwdt_rt.jsp?section=news&feed=ap&src=601&news_id=ap-d8vdfte00&date=20080314
that last paragraph is particularially interesting.
Friday March 14, 6:37 PM EDT
SEATTLE (AP) — Moody's Investors Service cut Washington Mutual Inc.'s credit rating Friday and said the country's largest savings and loan will need at least $4 billion more than it expected to cover bad mortgages in 2008.
Investors sent WaMu's shares down $1.54, or 12.7 percent, to close at $10.59 Friday.
Moody's said its action reflects a "rapid deterioration" of the housing market in the first few months of the year, echoing the rationale behind another rate cut by Standard & Poor's a week ago.
WaMu has estimated it will sock away up to $8 billion this year to account for borrowers who can't afford mortgage payments. Moodys' upped its own estimate for loan-loss provisioning to more than $12 billion Friday.
Resulting fiscal-year losses could eliminate the cash cushion that keeps WaMu in compliance with regulations, Moody's said in a news release.
http://finance.myway.com/jsp/nw/nwdt_rt.jsp?section=news&feed=ap&src=601&news_id=ap-d8vdfte00&date=20080314
that last paragraph is particularially interesting.