Moody's cuts Allied Capital

Moody's Investors Service said it downgraded Allied Capital Corp.'s senior unsecured rating to Baa3 and placed its ratings under review for downgrade.

Moody's said the downgrade and review for downgrade follows the decline in Allied's capital levels, which has resulted in a minor cushion over its most stringent quarterly minimum net worth covenant and put pressure on its regulatory capital requirement.

The decline in capital has resulted from a series of quarterly losses and the requirement to distribute 90% of its taxable income, the agency said.

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