New York, September 30, 2008 -- Correction to second paragraph, assumption of Wachovia Preferred
Funding Corp. preferred stock. Revised Release follows.
Moody's placed Wachovia Corporation's senior and subordinated debt ratings
(senior at A1) and the deposit and debt ratings of Wachovia banks and
thrifts (deposits at Aa2) under review direction uncertain. Moody's
lowered Wachovia's preferred stock rating to Ba3 from A3 and placed it
under review with direction uncertain. Moody's also placed the
B financial strength rating of Wachovia's bank and thrifts on review for
possible downgrade. The Prime-1 rating on the bank,
and the Prime-1 commercial paper rating on Wachovia Corporation
were affirmed.
Moody's rating action follows the announcement that Citigroup will acquire
the bank and thrift assets of Wachovia Corporation for $2.1
billion. Citigroup also announced that it will assume the senior
and subordinated debt, including the junior subordinated debt of
Wachovia Corporation and preferred stock of Wachovia Preferred Funding
Corp. Citigroup will not acquire Wachovia's retail brokerage operations,
Wachovia Securities, or Wachovia's asset management operations,
Evergreen. These operations will remain with Wachovia Corporation.
In response to this transaction Moody's placed the ratings of Citigroup
Inc. and Citibank under review for possible downgrade. Moody's
said that Wachovia Corporation's deposit, senior and subordinated
debt, will be dependent on the outcome of its review of Citigroup,
Inc.'s ratings.
Citigroup's ratings on review for possible downgrade include Citibank
N.A.'s B financial strength rating and Aa1 deposit and other
senior obligations ratings. Also under review for possible downgrade
are Citigroup, Inc.'s Aa3 senior debt rating, A1 subordinated
debt rating, and A2 preferred securities rating (please see related
press release issued today).
Because Wachovia's bank and holding company ratings are lower than Citigroup's,
Moody's placed Wachovia's senior and subordinated debt ratings on review
with direction uncertain. That is, if Citigroup's ratings
are confirmed, Wachovia's ratings could be raised. If Citigroup's
ratings are lowered, then Wachovia's ratings could be confirmed
or lowered depending on the level of downgrades for Citigroup, said
Moody's.
Wachovia Bank's B financial strength rating, which is at the same
level as Citibank's financial strength rating, is under review for
possible downgrade.
The severe downgrade of Wachovia Corporation's preferred stock to Ba3
from A3 reflects the expected substantial increase in leverage at the
holding company, whose major assets will be the operations of the
retail brokerage Wachovia Securities and Evergreen Asset Management.
The review with direction uncertain reflects the uncertainty regarding
the future financial profile of Wachovia Corporation. Key considerations
that will determine the future rating direction for the preferred stock
include the strategic and financial plans for the newly constituted holding
company, its capital structure, and the operating earnings
of this entity given its new business mix.
Rating actions are:
Downgrades:
..Issuer: First Fidelity Bancorporation
....Preferred Stock Preferred Stock,
Downgraded to Ba3 from A3
..Issuer: Wachovia Corporation
....Multiple Seniority Shelf, Downgraded
to (P)Ba3 from (P)A3
....Preferred Stock Preferred Stock,
Downgraded to Ba3 from A3
....Preferred Stock Shelf, Downgraded
to (P)Ba3 from (P)A3
On Review for Possible Downgrade:
..Issuer: Wachovia Bank, N.A.
....Bank Financial Strength Rating,
Placed on Review for Possible Downgrade, currently B
..Issuer: World Savings Bank, FSB
....Bank Financial Strength Rating,
Placed on Review for Possible Downgrade, currently B
On Review Direction Uncertain:
..Issuer: Central Fidelity Capital Trust I
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
..Issuer: Congress Financial Capital Company
....Senior Unsecured Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently A1
..Issuer: CoreStates Capital I
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
..Issuer: CoreStates Capital II
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
..Issuer: CoreStates Capital III
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
..Issuer: First Union Capital I
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
....Preferred Stock Shelf, Placed on
Review Direction Uncertain, currently (P)A1
..Issuer: First Union Capital II
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
..Issuer: First Union Capital III
....Preferred Stock Shelf, Placed on
Review Direction Uncertain, currently (P)A2
..Issuer: First Union Institutional Capital I
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
..Issuer: First Union National Bank of Florida
....Subordinate Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently Aa3
..Issuer: Golden West Financial Corporation
....Issuer Rating, Placed on Review
Direction Uncertain, currently A1
....Senior Unsecured Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently A1
..Issuer: Meridian Bancorp, Inc.
....Multiple Seniority Shelf, Placed
on Review Direction Uncertain, currently (P)A3
..Issuer: South Carolina National Corporation
....Subordinate Medium-Term Note Program,
Placed on Review Direction Uncertain, currently A2
..Issuer: SouthTrust Bank
....Subordinate Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently Aa3
..Issuer: SouthTrust Bank of Georgia, N.A.
(Old)
....Subordinate Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently A2
..Issuer: SouthTrust Corporation
....Subordinate Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently A2
..Issuer: Wachovia Bank, N.A.
....Issuer Rating, Placed on Review
Direction Uncertain, currently Aa2
....OSO Senior Unsecured OSO Rating,
Placed on Review Direction Uncertain, currently Aa2
....Multiple Seniority Bank Note Program,
Placed on Review Direction Uncertain, currently Aa3
....Multiple Seniority Medium-Term
Note Program, Placed on Review Direction Uncertain, currently
Aa3
....Subordinate Bank Note Program, Placed
on Review Direction Uncertain, currently Aa3
....Subordinate Conv./Exch.
Bond/Debenture, Placed on Review Direction Uncertain, currently
Aa3
....Subordinate Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently Aa3
....Senior Unsecured Bank Note Program,
Placed on Review Direction Uncertain, currently Aa2
....Senior Unsecured Deposit Note/Takedown,
Placed on Review Direction Uncertain, currently Aa2
....Senior Unsecured Conv./Exch.
Bond/Debenture, Placed on Review Direction Uncertain, currently
Aa2
....Senior Unsecured Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently Aa2
....Senior Unsecured Deposit Rating,
Placed on Review Direction Uncertain, currently Aa2
..Issuer: Wachovia Bank, N.A.
(Old)
....Senior Unsecured Bank Note Program,
Placed on Review Direction Uncertain, currently Aa3
....Senior Unsecured Medium-Term Note
Program, Placed on Review Direction Uncertain, currently Aa3
....Senior Unsecured Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently Aa3
..Issuer: Wachovia Capital Trust I
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
..Issuer: Wachovia Capital Trust II
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
..Issuer: Wachovia Capital Trust III
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A3
....Preferred Stock Shelf, Placed on
Review Direction Uncertain, currently (P)A2
..Issuer: Wachovia Capital Trust IV
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
..Issuer: Wachovia Capital Trust IX
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
....Preferred Stock Shelf, Placed on
Review Direction Uncertain, currently (P)A3
..Issuer: Wachovia Capital Trust V
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
..Issuer: Wachovia Capital Trust VII
....Preferred Stock Shelf, Placed on
Review Direction Uncertain, currently (P)A2
..Issuer: Wachovia Capital Trust VIII
....Preferred Stock Shelf, Placed on
Review Direction Uncertain, currently (P)A2
..Issuer: Wachovia Capital Trust X
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A2
....Preferred Stock Shelf, Placed on
Review Direction Uncertain, currently (P)A3
..Issuer: Wachovia Capital Trust XI
....Preferred Stock Shelf, Placed on
Review Direction Uncertain, currently (P)A3
..Issuer: Wachovia Capital Trust XII
....Preferred Stock Shelf, Placed on
Review Direction Uncertain, currently (P)A3
..Issuer: Wachovia Capital Trust XIII
....Preferred Stock Shelf, Placed on
Review Direction Uncertain, currently (P)A3
..Issuer: Wachovia Capital Trust XIV
....Preferred Stock Shelf, Placed on
Review Direction Uncertain, currently (P)A2
..Issuer: Wachovia Capital Trust XV
....Preferred Stock Shelf, Placed on
Review Direction Uncertain, currently (P)A3
..Issuer: Wachovia Corporation
....Junior Subordinated Shelf, Placed
on Review Direction Uncertain, currently (P)A2
....Multiple Seniority Medium-Term
Note Program, Placed on Review Direction Uncertain, currently
A2
....Multiple Seniority Shelf, Placed
on Review Direction Uncertain, currently (P)A2
....Subordinate Medium-Term Note Program,
Placed on Review Direction Uncertain, currently A2
....Subordinate Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently A2
....Senior Unsecured Conv./Exch.
Bond/Debenture, Placed on Review Direction Uncertain, currently
A1
....Senior Unsecured Medium-Term Note
Program, Placed on Review Direction Uncertain, currently A1
....Senior Unsecured Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently A1
..Issuer: Wachovia Corporation (Old)
....Multiple Seniority Shelf, Placed
on Review Direction Uncertain, currently (P)A2
....Subordinate Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently A2
....Senior Subordinated Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently A2
....Senior Unsecured Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently A1
..Issuer: Western Financial Bank, F.S.B.
....Subordinate Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently Aa3
..Issuer: Wachovia Preferred Funding Corp.
....Preferred Stock Preferred Stock,
Placed on Review Direction Uncertain, currently A3
..Issuer: World Savings Bank, FSB
....Issuer Rating, Placed on Review
Direction Uncertain, currently Aa2
....OSO Senior Unsecured OSO Rating,
Placed on Review Direction Uncertain, currently Aa2
....Senior Unsecured Regular Bond/Debenture,
Placed on Review Direction Uncertain, currently Aa2
....Senior Unsecured Deposit Rating,
Placed on Review Direction Uncertain, currently Aa2
Outlook Actions:
..Issuer: Central Fidelity Capital Trust I
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Congress Financial Capital Company
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: CoreStates Capital I
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: CoreStates Capital II
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: CoreStates Capital III
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: First Fidelity Bancorporation
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: First Union Capital I
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: First Union Capital II
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: First Union Capital III
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: First Union Institutional Capital I
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: First Union National Bank of Florida
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Golden West Financial Corporation
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Meridian Bancorp, Inc.
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: South Carolina National Corporation
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: SouthTrust Bank
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: SouthTrust Bank of Georgia, N.A.
(Old)
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: SouthTrust Corporation
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Bank, N.A.
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Bank, N.A.
(Old)
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Capital Trust I
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Capital Trust II
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Capital Trust III
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Capital Trust IV
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Capital Trust IX
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Capital Trust V
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Capital Trust VII
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Capital Trust VIII
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Capital Trust X
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Corporation
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Corporation (Old)
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Wachovia Preferred Funding Corp.
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: Western Financial Bank, F.S.B.
....Outlook, Changed To Rating Under
Review From Negative
..Issuer: World Savings Bank, FSB
....Outlook, Changed To Rating Under
Review From Negative
Wachovia Corporation is headquartered in Charlotte, N.C.
Its reported assets as of June 30, 2008 were $812 billion.
New York
Sean Jones
Senior Vice President
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Robert Young
Managing Director
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Correction to text, September 29, 2008 Release: Moody's says Wachovia's ratings (snr A1) on review. Outcome dependent on its Citigroup review; Wachovia's preferred stock cut (to Ba3 from A3)
