Fitch cuts Riggs units to C

Fitch Ratings said it lowered the preferred ratings for Riggs Capital and Riggs Capital II, the two subsidiaries of Riggs National Corp., to C from B-. All of Riggs' ratings remain on Rating Watch evolving.

Fitch said it rating action takes into consideration the fact that Riggs will not pay the December semi-annual dividend as it did not gain written approval from the Federal Reserve Bank of Richmond and the director of the Division of Banking Supervision and Regulation of the Board of Governors to make such payment. This is a requirement of the cease and desist order signed by its officers on May 13.

The lack of regulatory approval highlights the uncertainty of Riggs' prospects and, in Fitch's view, a desire by the regulators to preserve capital until Riggs' financial condition improves.

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