S&P upgrades Freemont General

Standard & Poor's said it raised its ratings on Fremont General Corp., including Fremont's long-term counterparty credit rating to B+ from CCC+, senior unsecured rating to B+ from CCC+ and preferred stock rating to B- from CC.

S&P also revised the outlook on Fremont's ratings to stable from positive and assigned its BB- counterparty credit rating to Fremont's subsidiary, Fremont Investment & Loan.

The ratings actions and outlook revision are based on Fremont's strong profitability, low leverage, substantial capitalization, and diversified funding profile. Moreover, this upgrade incorporates the absence of exposure from the discontinued insurance operation, which was a significant negative factor in the previous rating, according to S&P.

The negative factors include Fremont's significant loan and business concentrations, explosive growth and the transactional nature of its revenues. Moreover, the company's participation in the volatile residential subprime mortgage industry and in higher risk bridge and construction lending are also limiting factors for the rating, the agency said.

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