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Related Issuers
Bank of New York Mellon (Ireland) Ltd. (The)
Bank of New York Mellon (Lux.) S.A. (The)
Bank of New York Mellon (The)
Bank of New York Mellon Corporation (The)
BANK OF NEW YORK MELLON SA/NV (Milan Branch)
Bank of New York Mellon Trust Company, N.A.
BANK ONE Capital III
BANK ONE Capital VI
BANK ONE CORPORATION
Bank One, Michigan
Bear Stearns Companies LLC. (The)
Bear Stearns Global Asset Holdings, Ltd.
BNY Capital IV
BNY Capital V
BNY Institutional Capital Trust A
BNY Mellon National Association
BNY Mellon Trust of Delaware
Chase Bank USA, National Association
Chase Capital II
Chase Capital III
Chase Capital VI
Chase Manhattan Corporation (OLD)
First Chicago NBD Capital I
J.P. Morgan & Co. Incorporated
J.P. Morgan Bank Canada
J.P. Morgan Bank Dublin plc
J.P. Morgan Chase Capital X
J.P. Morgan Chase Capital XI
J.P. Morgan Chase Capital XII
J.P. Morgan Chase Capital XIII
J.P. Morgan Chase Capital XIV
J.P. Morgan Chase Capital XIX
J.P. Morgan Chase Capital XV
J.P. Morgan Chase Capital XVI
J.P. Morgan Chase Capital XVII
J.P. Morgan Chase Capital XVIII
J.P. Morgan Chase Capital XX
J.P. Morgan Chase Capital XXI
J.P. Morgan Chase Capital XXII
J.P. Morgan Chase Capital XXIII
J.P. Morgan Chase Capital XXIV
JP Morgan International Derivatives Ltd
JP MORGAN STRUCTURED PRODUCTS BV
JPMorgan Chase & Co.
JPMorgan Chase Bank (China) Company Limited
JPMorgan Chase Bank, N.A.
JPMorgan Chase Bank, N.A., London Branch
JPMorgan Chase Capital XXIX
JPMorgan Chase Capital XXV
JPMorgan Chase Capital XXVI
JPMorgan Chase Capital XXVII
JPMorgan Chase Capital XXVIII
Mellon Capital III
Mellon Capital IV
Mellon Funding Corporation
Morgan Guaranty Trust Company of New York
Announcement:

Moody's may cut BNY Mellon's and JPM's supported long-term ratings

18 Jul 2011

Action is directly related to Moody's placing US government's Aaa rating on review for possible downgrade

New York, July 18, 2011 -- Moody's Investors Service placed the supported ratings of Bank of New York Mellon and JPMorgan Chase and their subsidiaries under review for possible downgrade. The action was directly related to Moody's placing the US government's Aaa rating on review for possible downgrade on July 13th 2011; the action does not reflect a change to Moody's opinion of the entities' standalone financial strength.

More specifically, Moody's placed the deposit, senior debt, and subordinated debt ratings of The Bank of New York Mellon Corporation (Aa2 senior) and its subsidiaries (bank at Aaa for deposits) and JPMorgan Chase & Co (Aa3 senior) and its subsidiaries (bank at Aa1 for deposits) on review for possible downgrade. The ratings under review currently benefit from "lift" above the banks' standalone financial strength due to Moody's assessment of the likelihood of US government support. All short-term ratings for both entities were affirmed at Prime-1 and are unaffected by this action.

Moody's said that certain other ratings of these companies do not receive any support uplift, and these also are not under review. These include the unsupported bank financial strength ratings (BFSR) and the preferred securities ratings. Bank of New York Mellon's unsupported BFSR is B+ which maps to a Aa2 rating on the long-term scale. JPMorgan Chase's unsupported BFSR is B which maps to a Aa3 rating on the long-term scale.

Rating Rationale

The review on BNY Mellon's and JPMorgan Chase's supported debt ratings is directly related to Moody's recent placement of the US government's Aaa rating on review for possible downgrade. BNY Mellon's and JPMorgan Chase's deposit-, senior- and subordinated debt ratings receive a lift from Moody's opinion that there is a very high probability that these institutions would be supported by the US government to avoid a default. For each entity, the ratings lift is equivalent to two notches, from an unsupported level of Aa2 to Aaa for BNY Mellon and from Aa3 to Aa1 for JP Morgan Chase, at the senior debt and deposit level of the banks. If the US government were downgraded, even to Aa1, the level of lift for BNY Mellon and JPMorgan Chase would fall as well.

"The potential reduction in rating uplift for each bank is a product of both their high standalone ratings and the possibility that the supporting entity -- the US government -- could be downgraded", said Moody's Senior Vice President, Sean Jones.

If BNY Mellon and JPMorgan Chase were downgraded by one notch, their respective holding company ratings would no longer incorporate any lift from Moody's systemic support assumptions. Under such circumstances, BNY Mellon's and JPMorgan Chase's junior subordinated debt ratings would be downgraded by one notch, consistent with Moody's notching practices; as a result, these securities also were placed on review for possible downgrade.

The Ratings of Only Eight US Banks Currently Benefit from Moody's Systemic Support Assumptions

Moody' said that BNY Mellon and JPMorgan Chase are two of eight US banks that currently receive ratings lift due to Moody's assessment of the likelihood of systemic support. With today's action on BNY Mellon and JPMorgan Chase, the potential effects of a downgrade to the US government's Aaa rating are incorporated into the current status of each of these eight bank's ratings. Of these eight, three banking groups' supported ratings are already under review for possible downgrade. These are: Bank of America (senior debt at the holding company A2, bank at Aa3 for deposits, BFSR at C-/Baa1), Citigroup (senior debt at the holding company A3, bank at A1 for deposits, BFSR at C-/Baa1), and Wells Fargo (senior debt at A1, bank at Aa2 for deposits, BFSR at C+/A2). As a part of this review, the rating agency will also consider the potential impact of any downgrade of the US government's rating. However, Moody's said it is unlikely that a downgrade of the US government's rating into the Aa range would have any incremental effect on these three entities' supported ratings beyond that already being considered in their existing reviews.

For the remaining three US banking groups whose ratings benefit from the assumption of systemic lift -- Goldman Sachs Group, Inc. (senior debt at the holding company at A1, bank at Aa3 for deposits, and BFSR at B-/A1), Morgan Stanley (senior debt at the holding company A2, bank at A1 for deposits, and BFSR at C/A3) and State Street Corporation (senior debt at A1, bank at Aa2 for deposits, and BFSR at B/Aa3) -- Moody's said its assessment incorporates a lower support probability, and as a result their supported ratings would likely not be affected if the US government rating was downgraded to Aa.

Moody's last rating action on Bank of New York Mellon was on June 2, 2011, when the rating outlook on the deposit, senior debt, and senior subordinated debt ratings of Bank of New York Mellon was changed to negative from stable.

Moody's last rating action on JPMorgan Chase & Co was on December 22, 2009, when Moody's lowered its ratings on certain JPMorgan Chase & Co. (JPM or the holding company) hybrid securities as part of the implementation of Moody's updated guidelines for rating bank hybrid securities.

The principal methodologies used in rating were Bank Financial Strength Ratings: Global Methodology published February 2007, Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology published March 2007, and Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt published November 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies. 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.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

Both Bank of New York Mellon's and JPMorgan Chase & Co's headquarters are in New York City. Bank of New York Mellon's reported assets of as March 31st 2011 were $258 billion. JPMorgan Chase & Co's reported assets were $2.2 trillion as of June 30th 2011.

A detailed list of the affected ratings is available on Moody's website, which may be accessed by clicking here

http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF255758

New York
Sean Jones
Senior Vice President
Financial Institutions Group
Moody's Investors Service, Inc.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Robert Young
MD - Financial Institutions
Financial Institutions Group
Moody's Investors Service, Inc.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's may cut BNY Mellon's and JPM's supported long-term ratings
No Related Data.
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