Moody's puts WaMu on review, cuts strength rating

Moody's Investors Service said it downgraded the financial strength rating of Washington Mutual Bank to E from D+.

Additionally, the agency said that Washington Mutual Inc. preferred stock was downgraded to Ca from B2.

All ratings of Washington Mutual Bank (deposits and senior unsecured at Baa3, subordinate debt at Ba1, short-term Prime-3) and Washington Mutual Inc. (senior unsecured at Ba2, subordinate at Ba3, preferred at Ca) were placed under review for downgrade, Moody's noted.

The downgrade of the Bank financial strength rating resulted from WaMu's severe asset quality issues, which are depleting its capital base and leading to an erosion of its franchise, the agency noted.

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