Moody's cuts Wachovia preferreds; direction uncertain

Moody's Investors Service said it said in a corrected release that it placed Wachovia Corp.'s senior and subordinated debt ratings (senior at A1) and the deposit and debt ratings of Wachovia banks and thrifts (deposits at Aa2) under review direction uncertain.

Moody's said it lowered Wachovia's preferred stock rating to Ba3 from A3 and placed it under review with direction uncertain.

Moody's noted that it also placed the B financial strength rating of Wachovia's bank and thrifts on review for possible downgrade while the Prime-1 rating on the bank, and the Prime-1 commercial paper rating on Wachovia Corp. were affirmed.

Moody's said that its rating action follows the announcement that Citigroup will acquire the bank and thrift assets of Wachovia Corp. for $2.1 billion, noting that Citigroup also announced that it will assume the senior and subordinated debt, including the junior subordinated debt of Wachovia Corp. and preferred stock of Wachovia Preferred Funding Corp.

In response to this transaction Moody's previously said it placed the ratings of Citigroup Inc. and Citibank under review for possible downgrade. Moody's said that Wachovia Corp.'s deposit, senior and subordinated debt, will be dependent on the outcome of its review of Citigroup, Inc.'s ratings.

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