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S&P downgrades Advanta
Standard & Poor's said it lowered its long-term counterparty credit rating on Advanta Corp. to B- from B+ and its long-term counterparty credit rating on Advanta's operating subsidiary, Advanta Bank Corp., to B from BB-.
The outlook remains negative.
The agency said the downgrade reflects its expectation that Advanta's asset quality will continue to deteriorate materially because of recessionary economic conditions, likely leading to further quarterly net losses in 2009.
Increasing losses in Advanta's revolving securitization trust could also trigger cash trapping mechanisms and ultimately hinder the company's ability to fund itself via the asset-backed securities market over the longer-term, S&P added.
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