Moody's drops Regions

Moody's Investors Service said it downgraded the ratings of Regions Financial Corp. (senior to Baa3 from A3) and its subsidiaries, including its lead bank, Regions Bank (bank financial strength to D+ from C+, long-term deposits to Baa1 from A2, and short-term deposits to Prime-2 from Prime-1).

According to the agency, Regions' hybrid securities, including its preferred shelf to provisional B1 from provisional Baa2, trust preferreds to Ba2 from Baa1 and bank level preferred to Ba2 from Baa1 remain on review for possible downgrade.

The outlook on Regions and its subsidiaries is negative.

The agency said that these actions had no impact on the FDIC guaranteed debt issued by Regions Bank, which remains at Aaa with a stable outlook, while the downgrade reflects Moody's view that Regions' is likely to report losses at least through 2009 and likely into 2010 as a result of rising credit costs.

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