Moody's may downgrade Astoria

Moody's Investors Service said it placed the ratings of Astoria Financial Corp. and its subsidiaries on review for possible downgrade, including Astoria's A2 issuer and senior unsecured bond ratings, Astoria Capital Trust I's A3 preferred stock rating and Astoria Federal Savings & Loan Association's A1 senior unsecured rating.

The agency said the review was prompted by Astoria's concentration in jumbo residential mortgages in New York metropolitan area, coupled with Moody's expectation of more pronounced deterioration in the asset quality of these loans; the projected weakening in the ratio of core deposits to loans in light of the company's expectation of appreciably faster loan growth than deposit growth; and the continuing dependence of the holding company on the thrift subsidiary to meet its operating and financial obligations.

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