All other ratings (senior at Aa3) unchanged
New York, December 22, 2009 -- Moody's Investors Service lowered its ratings on certain JPMorgan
Chase & Co. (JPM or the holding company) hybrid securities,
in line with its revised Guidelines for Rating Bank Hybrids and Subordinated
Debt published in November 2009. Moody's lowered JPM's
junior subordinated debt securities with cumulative deferral features
to A2 from A1. JPM's cumulative preferred securities were
lowered to A3 from A2, and its non-cumulative preferred securities
were lowered to Baa1 from A2. This concludes the review for possible
downgrade that began on November 18th, 2009. The list of
the affected securities can be accessed through this link.
http://v3.moodys.com/page/viewresearchdoc.aspx?docid=PBC_122065
All other ratings on JPM and its subsidiaries were unchanged. These
include Moody's unsupported Bank Financial Strength Rating (BFSR)
of B, which translates to a Baseline Credit Assessment (BCA) of
Aa3 for JPMorgan Chase Bank N.A. The Aa1 rating on the bank
for deposits incorporates two notches of lift because of Moody's
assumption that JPMorgan Chase Bank N.A. benefits from very
high systemic support. The Aa3 rating on the senior unsecured notes
issued by the holding company also remains unchanged and incorporates
one notch of lift given Moody's systemic support assumptions.
The rating outlook for JPM and its subsidiaries remains negative.
Moody's said that, under the revised methodology, hybrid
securities with deferral mechanisms will be anchored from the bank's
Adjusted Baseline Credit Assessment (Adjusted BCA) as opposed to JPM's
supported deposit and senior debt ratings. The Adjusted BCA is
determined by adding parental and/or cooperative support to the bank's
BCA, if applicable. In JPM's case, since neither
parental nor cooperative support applies, the Adjusted BCA is Aa3,
the same as the bank's BCA. For hybrids issued by the holding
company, an additional adjustment is made to capture the risk of
structural subordination.
The revised methodology also stipulates that Moody's will rate junior
subordinated debt securities with deferral features at least one notch
lower than senior subordinated securities without deferral features,
and it will notch non-cumulative preferred securities at least
one notch lower than cumulative preferred securities. Moody's
downgrades on JPM's hybrids incorporate these methodological revisions
in addition to the structural subordination of the holding company -
the legal entity that either issues or guarantees the hybrid securities
on a subordinated basis.
In summary, Moody's rated JPM's junior subordinated
debt securities with deferral features two notches below the bank's
Adjusted BCA of Aa3, while JPM's cumulative preferred and
non-cumulative preferred securities were rated three and four notches,
respectively, below the Adjusted BCA.
Moody's last rating action on JPM was on November 18th, 2009,
when its hybrid securities were placed on review for possible downgrade.
The principal methodologies used in rating this issuer 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.
These are available on www.moodys.com in the Rating Methodologies
sub-directory under the Research & Ratings tab. Other
methodologies and factors that may have been considered in the process
of rating this issuer can also be found in the Rating Methodologies sub-directory
on Moody's website.
JPMorgan Chase & Co is headquartered in New York, New York.
Its reported assets were $2 trillion as of September 30th,
2009.
Issuer: BANK ONE Capital III
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
Issuer: BANK ONE Capital IX
..Downgrades:
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: BANK ONE Capital V
..Downgrades:
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: BANK ONE Capital VI
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
Issuer: BANK ONE Capital VII
..Downgrades:
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: BANK ONE Capital VIII
..Downgrades:
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: BANK ONE Capital X
..Downgrades:
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: Bear Stearns Capital Trust III
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: Bear Stearns Capital Trust IV
..Downgrades:
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: Bear Stearns Capital Trust V
..Downgrades:
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: Bear Stearns Companies LLC. (The)
..Downgrades:
....Junior Subordinated Shelf, Downgraded
to (P)A2 from (P)A1
....Multiple Seniority Shelf, Downgraded
to (P)A3, (P)Baa1 from (P)A2, (P)A2
....Multiple Seniority Shelf, Downgraded
to (P)A3, (P)Baa1 from (P)A2, (P)A2
....Multiple Seniority Shelf, Downgraded
to (P)A3, (P)Baa1 from (P)A2, (P)A2
....Multiple Seniority Shelf, Downgraded
to (P)A3, (P)Baa1 from (P)A2, (P)A2
....Multiple Seniority Shelf, Downgraded
to (P)A3, (P)Baa1 from (P)A2, (P)A2
Issuer: Bear Stearns Finance LLC
..Downgrades:
....Preferred Stock Shelf, Downgraded
to (P)A3 from (P)A2
Issuer: Chase Capital II
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
Issuer: Chase Capital III
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
Issuer: Chase Capital IX
..Downgrades:
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: Chase Capital VI
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: First Chicago NBD Capital I
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
Issuer: J.P. Morgan & Co. Incorporated
..Downgrades:
....Multiple Seniority Shelf, Downgraded
to (P)A3 from (P)A2
....Multiple Seniority Shelf, Downgraded
to (P)A3 from (P)A2
....Multiple Seniority Shelf, Downgraded
to (P)A3 from (P)A2
....Multiple Seniority Shelf, Downgraded
to (P)A3, (P)Baa1 from (P)A2, (P)A2
....Multiple Seniority Shelf, Downgraded
to (P)A3, (P)Baa1 from (P)A2, (P)A2
....Multiple Seniority Shelf, Downgraded
to (P)A3, (P)Baa1 from (P)A2, (P)A2
Issuer: J.P. Morgan Chase Capital X
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
Issuer: J.P. Morgan Chase Capital XI
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XII
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XIII
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XIV
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XIX
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XV
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XVI
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XVII
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XVIII
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XX
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XXI
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XXII
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XXIII
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: J.P. Morgan Chase Capital XXIV
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: JPM Capital Trust I
..Downgrades:
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: JPM Capital Trust III
..Downgrades:
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: JPM Capital Trust IV
..Downgrades:
....Preferred Stock Shelf, Downgraded
to (P)A2 from (P)A1
Issuer: JPMorgan Chase & Co.
..Downgrades:
....Junior Subordinated Shelf, Downgraded
to (P)A2 from (P)A1
....Multiple Seniority Shelf, Downgraded
to a range of (P)Baa1 to (P)A3 from (P)A2
....Multiple Seniority Shelf, Downgraded
to (P)A3, (P)Baa1 from (P)A2, (P)A2
....Multiple Seniority Shelf, Downgraded
to (P)A3, (P)Baa1 from (P)A2, (P)A2
....Multiple Seniority Shelf, Downgraded
to (P)A3, (P)Baa1 from (P)A2, (P)A2
....Preferred Stock Preferred Stock,
Downgraded to a range of Baa1 to A3 from A2
....Preferred Stock Shelf, Downgraded
to (P)A3 from (P)A2
Issuer: JPMorgan Chase Capital XXV
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
Issuer: JPMorgan Chase Capital XXVI
..Downgrades:
....Junior Subordinated Regular Bond/Debenture,
Downgraded to A2 from A1
Issuer: JPMorgan Chase Capital XXVII
..Downgrades:
....Preferred Stock Preferred Stock,
Downgraded to A2 from A1
New York
Sean Jones
Senior Vice President
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
David Fanger
Senior Vice President
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's lowers JPMorgan Chase's hybrid securities ratings