Moody's cuts Pacific Capital

Moody's Investors Service said it downgraded Pacific Capital Bancorp's long-term issuer rating to C from Caa1 and kept the rating under review for further downgrade.

Moody's said that the downgrade follows Pacific Capital's announcement that it received a directive from the Office of the Comptroller of the Currency that the bank may not engage in refund anticipation loans.

The downgrade reflects heightened concern that depositors and creditors are more exposed to losses due to the fewer alternatives that Pacific Capital has to improve its capital position, the agency noted.

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