Moody's lowers Wilmington

Moody's Investors Service said it downgraded Wilmington Trust Co.'s issuer rating and senior unsecured rating to Baa2 from A3 and Wilmington Trust Corp.'s issuer rating to Baa3 from Baa1 and subordinated bonds to Ba1 from Baa2. The Prime-2 short-term deposit rating of was affirmed.

This concludes the review for possible downgrade begun on March 12, and the outlook is negative.

The agency said the downgrade and negative outlook reflect its view that Wilmington's capital position - both its regulatory capital and tangible common equity - could come under pressure over the next 12 to 18 months because of its large real estate lending concentration as well as its investments in bank trust preferred securities.

Wilmington's sound capital ratios support its current ratings, Moody's said, adding that Wilmington has flexibility in reducing its common dividend again to support capital should elevated credit costs threaten to weaken its internal capital generation.

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