Moody's Investors Service of New York said it took the action, which affects $5.7 billion in BankAmerica debt issues and preferred stock, because it believes that continued loan losses will put severe pressure on the bank company's earnings. BankAmerica's senior debt was dropped to Baa1 from A2, subordinated debt to Baa2 from A3, preferred stock to Baa2 from A2, shelf registration for senior debt to P-Baa1 from P-A2 and commercial paper to Prime 2 from Prime 1. Moody's also lowered securities ratings for the firm's bank subsidiary, Bank of America. The bank's senior debt went to A2 from Aa3, debt issues supported by letters of credit to A2 from Aa3 and long-term deposits to A2 from Aa3.
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