MOODY'S AFFIRMS CREDIT RATINGS OF WACHOVIA CORPORATION (SENIOR AT Aa3). RATING OUTLOOK REMAINS NEGATIVE
New York, June 15, 2000 -- Moody's Investors Service affirmed Wachovia Corporation's ratings (senior at Aa3), and reiterated its negative rating outlook on the company. Moody's action follows Wachovia's announcement of lower-than-anticipated earnings due to current market conditions and the related negative impact on business volumes. Wachovia's second quarter results will also reflect a special provision expense of approximately $200 million in order to augment its loan loss reserves. The company signaled that nonperforming assets will rise in the second quarter, 2000.
According to the rating agency, Wachovia has responded to industry-wide margin compression by venturing outside its traditional lines. The resulting increase in Wachovia's risk profile is captured in the negative rating outlook. Moody's added that Wachovia's traditional banking franchise remains strong, supported by a stable deposit base and respectable capital measures.
Wachovia Corporation is headquartered in Winston-Salem with assets of $69 billion as of March 31, 2000.
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