Fitch cuts Riggs ratings

Fitch Ratings said it has lowered the ratings for Riggs National Corp. and its rated subsidiaries. Riggs' long-term and individual ratings were lowered to BB from BB+ and D from C/D, respectively.

Fitch also maintains the Rating Watch negative status on Riggs.

Fitch said the rating actions reflect Fitch's concerns regarding implications tied to Riggs Bank NA being deemed a "troubled condition" institution by the Office of the Comptroller of the Currency and the sizeable $19 million restructuring charge related to exiting higher risk businesses (including the sale of the company airplane).

Further, in the near term it is expected that the OCC and Financial Crimes Enforcement Network will levy monetary penalties, which will place additional pressure on capital and further reduce Riggs' financial flexibility, the ratings agency said.

Additionally, the Federal Reserve advised Riggs that it will request Riggs and Riggs International Banking Corp. (its Edge Act Corp.) to enter into an enforcement order, which may include a requirement that Riggs obtain the prior approval of the Federal Reserve prior to declaring and paying dividends, including dividends on its trust preferred securities, and interest at the holding company level.

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