Moody's may downgrade Wells Fargo

Moody's Investors Service said it placed its ratings on Wells Fargo & Co. and subsidiaries under review for possible downgrade, including Wells Fargo's Aa1 issuer rating, Aa3 preferred stock, Aa2 subordinated bonds and Aa1 senior unsecured regular and convertible bonds.

The Prime-1 short-term ratings were affirmed.

The review follows the announcement by Wells Fargo that it terminated discussions with Citigroup, Inc. concerning a possible sale of certain banking assets of Wachovia Corp. and reaffirmed that it is proceeding with its acquisition of all of Wachovia and all its businesses and obligations.

The agency said the credit challenges of the transaction center on integration risk and the potential for an increase in Wells Fargo's risk profile.

However, the proposed acquisition will substantially broaden Wells Fargo's banking business, Moody's said, and the credit benefits stemming from this acquisition could be improved franchise value.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.