Moody's keeps Doral on review

Moody's Investors Service said it is continuing its review for possible downgrade of Doral Financial Corp.

Ratings that are on review for possible downgrade include Doral Financial Corp.'s senior debt at Ba1 and subordinated debt at Ba2.

Moody's last downgraded Doral's debt (senior to Ba1 from Baa3) on Sept. 6. Citing a number of ongoing uncertainties, the rating agency had kept Doral's ratings under review for further possible downgrade and had announced its intention to resolve the review by the end of September.

According to Moody's, a number of positive developments have occurred since the last rating action. First, Doral has recently disclosed that it expects to file its restated financial statements by Nov. 10 as well as its 10-Q reports for the first three quarters of 2005 as soon as practicable thereafter. Secondly, because creditors have not elected to accelerate debt repayments, the company's liquidity position remains adequate to meet cash requirements through mid-year 2007. Finally, there appears to be no impact from the corporate turmoil on Doral's main franchise, which is mortgage loan origination.

Moody's added that there have been a number of improvements in the area of risk management, particularly in asset liability management, but there may be the need for further change in other areas, most notably in Doral's corporate governance.

© 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.