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Announcement:

Moody's places Regions on review for upgrade (senior at Ba3)

Global Credit Research - 03 Oct 2012

NOTE: On November 08, 2012, the press release was revised as follows: Correction In the debt list, added a hybrid (hyb) indicator to the following debts: the preferred stocks of Regions Financing Trust II and Regions Financing Trust III, and the non-cumulative preferred stock of Union Planters Preferred Funding Corp. Revised release follows.

New York, October 03, 2012 -- Moody's Investors Service placed the long-term ratings of Regions Financial Corporation and its subsidiaries on review for upgrade. Regions Financial Corporation is rated Ba3 for senior debt and B1 for subordinated debt and its lead operating bank, Regions Bank has a standalone bank financial strength rating of D+, which maps to a baseline credit assessment of ba1. The bank's long-term deposit rating is Ba1 and its rating for senior debt is Ba2. The standalone bank financial strength rating of D+ was affirmed but its baseline credit assessment of ba1 was placed under review for upgrade. The short-term Not-Prime ratings of Regions Financial Corporation were also affirmed and are not on review.

RATINGS RATIONALE

Moody's stated that in the past eighteen months, Regions has made much progress in reducing its risk profile by decreasing its asset concentrations, including in commercial real estate (CRE) and home equity (HE). Regions' CRE and HE exposures declined 40% and 13%, respectively from December 31, 2010 to June 30, 2012. The combined CRE and HE exposure was approximately 2.3 times Moody's adjusted tangible common equity (TCE) at June 30, 2012, compared to approximately 3.7 times TCE at December 31, 2010. The rating agency also stated that these reductions in concentration risk were coupled with Regions' concerted efforts to strengthen its internal controls and risk management infrastructure.

Moody's said the review will focus on Regions' prospects in reducing its level of nonperforming assets (NPAs), including troubled debt restructurings which are a large portion of Regions' NPAs. Moody's stated that Regions' NPAs, which include nonaccrual loans, loans past due 90+ days, OREO, and troubled debt restructurings remained elevated at 7.3% of loans plus OREO or 48% TCE plus reserves at June 30, 2012.

The review will also focus on the tactical and strategic initiatives, such as adding risk in their securities portfolios or diversifying into other business segments, that Regions may undertake in order to address earnings pressure in the protracted low interest rate environment.

Moody's also attached a hybrid (hyb) indicator to the preferred stock ratings of Regions Asset Management Company, Inc.

The last rating action on Regions was on February 14, 2012 when the outlook was changed to stable from negative.

The principal methodology used in this rating was Moody's Consolidated Global Bank Rating Methodology published in 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Regions Financial Corporation headquartered in Birmingham, Alabama, reported total assets of $122 billion at June 30, 2012.

On Review for Possible Upgrade:

..Issuer: AmSouth Bancorporation

....Subordinate Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently B1

..Issuer: AmSouth Bank

....Subordinate Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Ba3

....Subordinate Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Ba3

..Issuer: Regions Asset Management Company, Inc.

....Pref. Stock Preferred Stock, Placed on Review for Possible Upgrade, currently B1 (hyb)

..Issuer: Regions Bank

.... Issuer Rating, Placed on Review for Possible Upgrade, currently Ba2

.... OSO Rating, Placed on Review for Possible Upgrade, currently NP

.... Deposit Rating, Placed on Review for Possible Upgrade, currently NP

....OSO Senior Unsecured OSO Rating, Placed on Review for Possible Upgrade, currently Ba2

....Multiple Seniority Bank Note Program, Placed on Review for Possible Upgrade, currently a range of (P)NP to (P)Ba2

....Multiple Seniority Bank Note Program, Placed on Review for Possible Upgrade, currently a range of (P)NP to (P)Ba2

....Subordinate Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Ba3

....Senior Unsecured Deposit Rating, Placed on Review for Possible Upgrade, currently Ba1

..Issuer: Regions Financial Corporation

.... Issuer Rating, Placed on Review for Possible Upgrade, currently Ba3

....Multiple Seniority Shelf, Placed on Review for Possible Upgrade, currently a range of (P)B3, (P)Ba3

....Subordinate Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently B1

....Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Ba3

..Issuer: Regions Financing Trust II

....Pref. Stock Preferred Stock, Placed on Review for Possible Upgrade, currently B2 (hyb)

..Issuer: Regions Financing Trust III

....Pref. Stock Preferred Stock, Placed on Review for Possible Upgrade, currently B2 (hyb)

..Issuer: Union Planters Bank, National Association

....Subordinate Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Ba3

..Issuer: Union Planters Preferred Funding Corp.

....Pref. Stock Non-cumulative Preferred Stock, Placed on Review for Possible Upgrade, currently B2 (hyb)

Outlook Actions:

..Issuer: AmSouth Bancorporation

....Outlook, Changed To Rating Under Review From Stable

..Issuer: AmSouth Bank

....Outlook, Changed To Rating Under Review From Stable

..Issuer: Regions Asset Management Company, Inc.

....Outlook, Changed To Rating Under Review From Stable

..Issuer: Regions Bank

....Outlook, Changed To Rating Under Review From Stable

..Issuer: Regions Financial Corporation

....Outlook, Changed To Rating Under Review From Stable

..Issuer: Regions Financing Trust II

....Outlook, Changed To Rating Under Review From Stable

..Issuer: Regions Financing Trust III

....Outlook, Changed To Rating Under Review From Stable

..Issuer: Union Planters Bank, National Association

....Outlook, Changed To Rating Under Review From Stable

..Issuer: Union Planters Preferred Funding Corp.

....Outlook, Changed To Rating Under Review From Stable

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Thuy Nguyen
Asst Vice President - Analyst
Financial Institutions Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Robert Franklyn Young
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's places Regions on review for upgrade (senior at Ba3)
No Related Data.

 

© 2013 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

 


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