S&P lowers Doral Financial

Standard & Poor's said it lowered the issuer credit rating on Doral Financial Corp. to CC from CCC- and placed the rating on CreditWatch with negative implications.

The downgrade reflects the institution's weakened capital position to the point that it has breached minimum regulatory capital requirements under its current consent order with the FDIC, S&P said.

The FDIC advised Doral Bank that it may no longer include in its calculation of its tier 1 capital some or all of the tax receivables from the government of Puerto Rico, the agency said.

Because the institution's capital fell below its minimum regulatory capital requirements, the rating is now CC, consistent with the agency's criteria, S&P said.

Without regulatory consent, Doral may have difficulty implementing a strategy that includes selling assets, which may further hurt its financial condition, the agency said.

Doral's currently vulnerable financial position and depressed stock price could mean that the bank faces significant challenges in trying to raise capital, S&P said.

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