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WASHINGTON: Standard & Poors lowered its debt rating for the major West Coast bank Washington Mutual, a week after Moody's downgraded its debt to non-investment or "junk" status.
S&P's move Monday further complicated plans to raise fresh capital for the troubled US bank, which has been ravaged by mortgage-related losses.
WaMu's long-term debt rating was lowered to 'BB-' from 'BBB-" by S&P. The bank responded in a statement that the move was due to an overall dive in market conditions, sparked by the collapse of investment giant Lehman Brothers.
"The change in Standard & Poor's ratings for Washington Mutual announced today brings S&P's ratings in line with those announced last week by Moody's," the company said.
"However, it's important to note that S&P attributed its action to worsening market conditions, and not to any material change in the evaluation of Washington Mutual's financial condition," it said.
"S&P's ratings for Washington Mutual Bank remain investment grade."
Earlier, three major credit agencies lowered their ratings for American International Group, making it harder for the US insurance giant to raise the cash needed to deal with its own liquidity crisis.
AIG has been shaken by fears that it could be the next domino to fall in the worst banking crisis to shake Wall Street since the Great Depression.
Saddled with toxic mortgage-backed derivatives, AIG was attempting to stave off the same type of liquidity crisis that has felled Bear Stearns and Lehman Brothers, which filed for bankruptcy protection on Monday, sending world markets into free fall.
- AFP/ir
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