Fitch rates Astoria notes BBB-

Fitch Ratings said it affirmed Astoria Financial Corp.'s ratings, downgraded some of Astoria Federal Savings & Loan's ratings, assigned a BBB-(exp) rating to Astoria Financial's proposed new issue of senior notes and revised the outlook to stable from negative.

Specifically, the agency affirmed Astoria Financial's long-term issuer default rating and senior debt at BBB-, short-term issuer default rating at F3, viability rating at bbb-, support rating at 5 and support floor at No Foor and Astoria Capital Trust I's preferred stock at B+.

Fitch downgraded Astoria Federal Savings & Loan's long-Term issuer default rating to BBB- from BBB, long-term deposits to BBB from BBB+, short-term issuer default rating to F3 from F2 and viability rating to bbb- from bbb and affirmed its short-term deposits at F2, support rating at 5 and support floor at No Floor.

The agency said the affirmation and outlook revision are primarily driven by the expected refinancing of the upcoming debt maturity. Fitch believes that continued improvement in capitalization and stable asset quality measures support Astoria Financial's ratings at the current level.

Astoria Federal Savings & Loan's ratings were equalized with the holding company. The agency said the holding company's ratings were previously one notch lower that its bank subsidiary because of constrained liquidity, which has improved with the announced debt refinancing and a recent dividend reduction.

The downgrade also reflects weak financial performance as well as continued uncertainty regarding the bank's 1 - 4 family business, Fitch said.

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