New York, November 22, 2010 -- Correction to first paragraph to replace 'left all long-term ratings
under review' with 'placed all long-term ratings under review',
and to include Regions Bank's BFSR placed on review for possible downgrade.
Revised release follows.
Moody's Investors Service downgraded the ratings of Regions Financial
Corporation (senior to Ba3 from Ba1) and its subsidiaries, including
its lead bank, Regions Bank (long-term deposits to Ba1 from
Baa3, short-term to Not-Prime from Prime-3),
and placed all long-term ratings under review for further possible
downgrade. Regions Bank's BFSR also was placed on review for possible
downgrade.
RATINGS RATIONALE
The downgrade and review follows Regions' announcement of senior leadership
changes in its risk management organization. On November 15,
2010, Regions announced the resignation of its Chief Risk Officer,
the retirement of the Director of Credit Risk, and that the head
of Problem Asset Management had left the company.
Regions has continued to face significant asset quality issues given its
credit concentrations as demonstrated by substantial inflows of non-performing
assets in 3Q10. This, coupled with the significant leadership
changes in the company's risk management organization, raises serious
concerns regarding the firm's controls and the path of future asset quality
charges. This was a key concern that led to today's rating action.
Additionally, given these developments, Moody's said that
during its review it will consider if its more severe stress scenario
better reflects the probable path of Regions asset quality and the implications
that this would have on Regions' capital base over the next several quarters.
These actions had no impact on the FDIC-guaranteed debt issued
by Regions Bank, which remains at Aaa with a stable outlook.
Moody's last rating action on Regions was on November 1, 2010,
when the holding company's senior rating was lowered to Ba1 from Baa3
and the bank's long-term deposits were lowered to Baa3 from Baa1
as a result of the removal of systemic support assumptions from the company's
ratings.
The principal methodologies used in this rating were Bank Financial Strength
Ratings: Global Methodology published in February 2007, Incorporation
of Joint-Default Analysis into Moody's Bank Ratings: A Refined
Methodology published in March 2007 and Moody's Guidelines for Rating
Bank Hybrid Securities and Subordinated Debt Published in November 2009.
Regions Financial Corporation headquartered in Birmingham, Alabama,
reported total assets of $134 billion at September 30, 2010.
Issuer: AmSouth Bancorporation
..Downgrades:
....Subordinate Regular Bond/Debenture,
Downgraded to B1 from Ba2
..Outlook Actions:
....Outlook, Changed To Rating Under
Review From Negative
Issuer: AmSouth Bank
..Downgrades:
....Subordinate Regular Bond/Debenture,
Downgraded to Ba3 from Ba1
..Outlook Actions:
....Outlook, Changed To Rating Under
Review From Negative
Issuer: Regions Asset Management Company, Inc.
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to B1 from Ba2
..Outlook Actions:
....Outlook, Changed To Rating Under
Review From Negative
Issuer: Regions Bank
..Downgrades:
.... Issuer Rating, Downgraded to Ba2
from Baa3
.... OSO Rating, Downgraded to NP from
P-3
.... Deposit Rating, Downgraded to NP
from P-3
....OSO Senior Unsecured OSO Rating,
Downgraded to Ba2 from Baa3
....Multiple Seniority Bank Note Program,
Downgraded to a range of Ba3 to NP from a range of Ba1 to P-3
....Subordinate Regular Bond/Debenture,
Downgraded to Ba3 from Ba1
....Senior Unsecured Deposit Rating,
Downgraded to Ba1 from Baa3
..Outlook Actions:
....Outlook, Changed To Rating Under
Review From Negative
Issuer: Regions Financial Corporation
..Downgrades:
.... Issuer Rating, Downgraded to Ba3
from Ba1
....Multiple Seniority Shelf, Downgraded
to a range of (P)B3 to (P)Ba3 from a range of (P)B1 to (P)Ba1
....Subordinate Regular Bond/Debenture,
Downgraded to B1 from Ba2
....Subordinate Shelf, Downgraded to
(P)B1 from (P)Ba2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Ba3 from Ba1
..Outlook Actions:
....Outlook, Changed To Rating Under
Review From Negative
Issuer: Regions Financing Trust II
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to B2 from Ba3
....Preferred Stock Shelf, Downgraded
to (P)B2 from (P)Ba3
..Outlook Actions:
....Outlook, Changed To Rating Under
Review From Negative
Issuer: Regions Financing Trust III
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to B2 from Ba3
..Outlook Actions:
....Outlook, Changed To Rating Under
Review From Negative
Issuer: Union Planters Bank, National Association
..Downgrades:
....Subordinate Regular Bond/Debenture,
Downgraded to Ba3 from Ba1
..Outlook Actions:
....Outlook, Changed To Rating Under
Review From Negative
Issuer: Union Planters Corporation
..Downgrades:
....Subordinate Regular Bond/Debenture,
Downgraded to B1 from Ba2
....Senior Unsecured Regular Bond/Debenture,
Downgraded to Ba3 from Ba1
..Outlook Actions:
....Outlook, Changed To Rating Under
Review From Negative
Issuer: Union Planters Preferred Funding Corp.
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to B2 from Ba3
..Outlook Actions:
....Outlook, Changed To Rating Under
Review From Negative
REGULATORY DISCLOSURES
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, public information and confidential
and proprietary Moody's Investors Service information.
Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purposes of maintaining
a credit rating.
Moody's adopts all necessary measures so that the information it uses
in assigning a credit 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 ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service 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 the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
New York
Robert Young
MD - Financial Institutions
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Gregory Frank
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
Correction to Text, Nov. 16, 2010 Release: Moody's Downgrades Regions to Ba3, Continues Review for Further Downgrade
