10:08 WM Washington Mutual: Follow up on WM S&P rating downgrade (11.81 -0.99) -Update-
Standard & Poor's Ratings Services said that it lowered its long-term counterparty credit rating on Washington Mutual Inc. to 'BBB' from 'BBB+' and its long-term counterparty credit rating on Washington Mutual Bank to 'BBB+' from 'A-'. Standard & Poor's also said that it placed all of its WAMU ratings on CreditWatch with negative implications. "These rating actions reflect our expectations for a more severe residential mortgage credit cycle than we had anticipated at the start of 2008," said Standard & Poor's credit analyst Victoria Wagner. "We now believe that the severity of losses on all residential mortgages will be higher that we had thought and that the weak housing market will now be a longer cycle. This adds to the time frame to resolve foreclosed properties and the cost to carry these nonperforming assets." As the first quarter of 2008 closes, the weakening in home prices in some of WAMU's key markets--California and Florida, for example--is accelerating more quickly than previously anticipated.
