MOODY'S REVIEWS RATINGS OF J.P. MORGAN & CO. (SENIOR AT Aa2) AND MORGAN GUARANTY TRUST COMPANY (DEPOSITS AT Aa1) FOR POSSIBLE DOWNGRADE; P-1 RATINGS CONFIRMED; MOODY'S CHANGES RATINGS OUTLOOK TO NEGATIVE FROM STABLE FOR CITICORP (Aa3) AND BANKERS TRUST N
New York, 02-02-98 -- Moody's Investors Service placed the long-term debt ratings of J.P. Morgan & Co. (senior at Aa2) and its rated subsidiaries, including Morgan Guaranty Trust Company (deposits at Aa1), on review for possible downgrade. The Prime-1 ratings of JPM and its subsidiaries are confirmed.
Moody's said that the review of JPM will focus on the company's exposures to troubled markets in southeast Asia and their potential impact on asset quality and earnings. JPM has moved swiftly to designate a portion of its exposure to Asian counterparties as non-performing, which, the rating agency said appeared prudent and conservative. Moody's said, however, that its review will consider the possibility of additional economic stress in the region and further deterioration in asset quality. Moody's added that the review will also encompass JPM's exposures to other emerging markets and the possibility that "contagion" effects from the Asian crisis could ultimately pressure other markets and economies.
Moody's changed Citicorp's ratings outlook to negative because of uncertainty regarding the impact of the turmoil in southeast Asia--which is a major source of earnings for Citicorp--on the company's asset quality, profitability and growth prospects.
Moody's said that the negative outlook for the ratings of Bankers Trust reflect similar concerns about exposures to emerging markets. These exposures--although smaller in absolute terms--are comparatively large relative to the bank's capitalization and earnings power.
The following ratings are on review for possible downgrade
J.P. Morgan & Co. Incorporated - Aa2 senior debt; Aa3 subordinated debt; "aa2" preferred stock; Aa2 counterparty rating
Morgan Guaranty Trust Company of New York - Aa1 bank deposit rating; Aa1 other senior obligation rating; Aa1 senior debt; Aa2 subordinated debt; Aa1 counterparty rating; A bank financial strength rating
Morgan Guaranty Trust Company of New York, Paris Branch - Aa1 bank deposit rating
J.P. Morgan Australia Ltd. - Aa1 senior debt
J.P. Morgan Index Funding Company, LLC - "aa1" preferred stock
JPM Capital Trust I - "aa2" preferred stock
JPM Capital Trust II - "aa2" preferred stock
JPM Capital Trust III - (P)"aa2" preferred stock
JPM Capital Trust IV - (P)"aa2" preferred stock
The following ratings are confirmed
J.P. Morgan & Co. Incorporated - Prime-1 commercial paper
Morgan Guaranty Trust Company of New York - Prime-1 bank deposit rating; Prime-1 other senior obligation rating; Prime-1 commercial paper
Morgan Guaranty Trust Company of New York, Paris Branch - Prime-1 bank deposit rating
J.P. Morgan Australia Ltd. - Prime-1 commercial paper
J.P. Morgan & Co. Incorporated is a bank holding company headquartered in New York, with total assets of $262 billion as of December 31, 1997.
Citicorp is a bank holding company headquartered in New York with $311 billion in total assets as of December 31, 1997.
Bankers Trust New York Corporation is a bank holding company headquartered in New York. It had total assets of $123 billion as of December 31, 1997.
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