Moody's affirms Advanta; outlook down to negative

Moody's Investors Service said it affirmed the ratings of Advanta Corp., including its senior unsecured rating of Ba3, and changed the outlook to negative from stable.

The change in outlook mainly reflects Moody's concerns regarding the company's asset quality, core profitability, and funding/liquidity, as the company navigates a challenging environment for credit card lenders.

Regarding asset quality, Advanta has been experiencing deteriorating net charge-off and delinquency measures since about mid-year 2007 attributable to: underwriting risk expansion in prior periods; relatively high exposure to geographic trouble spots, in particular California and Florida; a ramp-down in originations volume beginning in the second half of 2007 in response to the ongoing credit crunch and signs of weakening credit quality; and general U.S. economic deterioration, the agency said.

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