Moody's cuts Indymac to junk

Moody's Investors Service said it downgraded Indymac Bancorp, Inc.'s issuer rating to Ba1 from Baa3. Indymac's ratings remain under review for downgrade.

Indymac Bank, FSB's issurer rating was downgraded to Baa3 from Baa2, its preferred stock rating to Ba2 from Ba1 and its senior unsecured deposit rating to Baa3 from Baa2.

Moody's said that the downgrade reflects the decline in Indymac's financial metrics and franchise strength caused by the current mortgage sector conditions.

The watch for further downgrade reflects the risk that if mortgage sector liquidity issues continue, additional large mortgage-backed securities and held-for-sale inventory write-downs may be required, according to the agency.

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