Moody's: WaMu view stable

Moody's Investors Service said it changed the outlook on Washington Mutual, Inc. and Washington Mutual Bank to stable from negative following its definitive agreement to raise $1.5 billion of common equity and $5.5 billion of contingently convertible, perpetual non-cumulative preferred stock.

According to Moody's, the change in outlook reflects the agency's view that the capital raise of $7 billion provides sufficient cushion to maintain capital ratios that are greater than 100 basis points above the regulatory well capitalized minimums.

The agency said it expects lifetime provisioning needs of greater than $12 billion on WaMu's residential mortgage portfolio.

Moody's said it believes the company's capital cushion created by this equity raise could absorb provisioning needs of up to $18 billion.

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