Fitch cuts Riggs National

Fitch Ratings said it has lowered the ratings for Riggs National Corp. and its trust preferred subsidiaries, Riggs Capital and Riggs Capital II. Fitch also maintains the Rating Watch negative status on Riggs National and all subsidiaries.

The following ratings have been downgraded and remain on Rating Watch negative by Fitch: Riggs National Corp.'s long-term senior rating to BB- from BB and subordinated debt to B+ from BB-; Riggs Capital's preferred stock to B from BB-; and Riggs Capital II's preferred stock to B from BB-.

Fitch said the rating actions reflect Fitch's concern regarding recent regulatory actions, which place further pressure on Riggs' operating flexibility. Late last week, Riggs entered into a new consent order with the Office of the Comptroller of the Currency and was assessed a $25 million fine by the OCC and the Financial Crimes Enforcement Network, which was related to numerous violations of the Bank Secrecy Act.

The fine will effectively wipe out Riggs' 2004 earnings and places additional pressure on the company's capital. As expected, the OCC placed a number of additional requirements and restrictions on Riggs Bank NA, Riggs' primary bank subsidiary, many of which related to compliance with the BSA.

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