Fitch drops Cathay General to junk

Fitch Ratings said it downgraded Cathay General Bancorp's long-term issuer default rating to BB from BBB-, short-term issuer default rating to B from F3 and preferred stock to B+ to BB+.

The agency downgraded subsidiary Cathay Bank's long-term issuer default rating to BB from BBB- and short-term issuer default rating to B from F3, and removed ratings from Rating Watch negative.

The outlook is negative.

Fitch said the downgrade reflects the current level of credit deterioration and expected additional credit pressure given the composition and concentrations in loan book.

Ratings are underpinned by the company's sound capital base, as well as by its well established franchise among the Asian communities it serves, providing a stable core funding base, the agency said.

Concentration risk and limited earnings diversity constrain ratings, the agency noted.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.