Fitch drops Wachovia

Fitch Ratings said it downgraded the issuer default rating for Wachovia Corp. and its subsidiaries to A+ from AA-.

Fitch said it has also removed Wachovia from rating watch negative where it was originally placed on June 27.

The outlook is negative.

According to the agency, the rating downgrade reflects the increasingly pronounced asset quality deterioration evident in Wachovia's mortgage portfolio, specifically the Golden West-originated Pick-A-Pay product and the resulting pressure created by this asset class on the firm's financial flexibility.

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