S&P downgrades WaMu

Standard & Poor's said it lowered Washington Mutual, Inc.'s counterparty credit rating and senior unsecured debt ratings to D from CCC and its subordinated debt and preferred stock ratings to D from CC.

JPMorgan Chase & Co. has agreed to acquire all of Washington Mutual Bank's deposits but did not acquire the bank's senior and subordinated debt, so those debts reside in the FDIC receivership. Therefore, the agency revised the counterparty credit rating on Washington Mutual Bank to R from BBB- and the senior unsecured debt and subordinated debt ratings on the bank to D from BBB- and BB+, respectively.

These rating actions stem from the bank's placement in FDIC receivership and its simultaneous sale to JPMorgan, S&P said. As a result of the bank's receivership status, the agency expects the holding company to file for bankruptcy.

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