Moody's places major U.S. banks on review

Moody's Investors Service said it placed the senior and subordinated debt ratings of the holding companies for the six largest U.S. banks on review as it considers reducing its government (or systemic) support assumptions to reflect the impact of U.S. bank resolution policies.

The following ratings were placed on review for downgrade:

• Goldman Sachs Group, Inc.'s A3 senior debt, Baa1 subordinated debt and Baa3 (hyb) trust preferred vehicles;

• JPMorgan Chase & Co.'s A2 senior debt, A3 subordinated debt, Baa2 (hyb) trust preferred vehicles and Prime-1 short-term rating and JPMorgan Chase Bank NA's A1 subordinated debt;

• Morgan Stanley's Baa1 senior debt, Baa2 subordinated debt, Ba1 (hyb) trust preferred vehicles and Prime-2 short-term rating;

• Wells Fargo & Co., Inc.'s A2 senior debt, A3 subordinated debt, Baa1 (hyb) trust preferred vehicles and Prime-1 short-term rating and Wells Fargo Bank, NA's A1 subordinated and A3 (hyb) trust preferred vehicles;

• Bank of America Corp.'s Prime-2 short-term rating; and

• Citigroup, Inc.'s Prime-2 short-term rating.

The following ratings were placed on review direction uncertain:

• Bank of America Corp.'s Baa2 senior debt, Baa3 subordinated debt and Ba2 (hyb) trust preferred vehicles;

• Bank of America, NA's Baa1 subordinated; and

• Citigroup's Baa2 senior debt, Baa3 subordinated debt and Ba2 (hyb) trust preferred vehicles.

Bank of America and Citigroup are on review direction uncertain because the agency considers the potentially offsetting influence of improvements in the standalone credit strength of their main operating subsidiaries, the ratings on which were simultaneously placed on review for upgrade.

The following ratings were placed on review for upgrade:

• Bank of America, NA's A3 senior debt;

• Bank of America Corp.'s B1 (hyb) noncumulative preferred;

• Citibank, NA's A3 senior debt; and

• Citigroup's B1 (hyb) noncumulative preferred.

As U.S. bank resolution policies continue to evolve, Moody's will assess the opposing forces that may have an impact on bondholders at the holding company level should a bank become financially distressed. The first is a lower level of systemic support that could result in a higher probability of default. The second is the potential for a more orderly workout and a required minimum level of holding company debt that may well limit losses in the event of a default.

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