Roundup of Changes in Credit Ratings
Fraust, Bart, American Banker
The rating agencies took the following actions last week:
Dime Savings Bank of New York: Moody's assigned a B3 rating to a proposed preferred stock offering. The agency noted that Dime's capital position is improving and that the thrift has a strong franchise in the New York metropolitan area. However, high nonperforming assets remain a concern.
Single-family mortgages make up the majority of Dime's nonperforming assets, Moody's said. "These assets were poorly underwritten, low-documentation loans from the 1980s, which have resulted in unusually high losses," the agency said.
The new preferred stock is expected to lift Dime's risk-based capital ratio above 10% from 9.29% at June 3O. The Office of Thrift Supervision had required a 10% risk-based ratio by Dec. 31, 1994.
Shawmut National Corp.: Standard & Poor's revised the ratings outlook to positive from stable but affirmed senior debt at BBB-minus, subordinated debt at BB-plus, and preferred stock at BB.
Uninsured certificates of deposit and letters of credit issued by subsidiary banks were also affirmed, at BBB/A2.
"The outlook revision reflects continued strengthening of Shawmut's financial performance measures as asset-quality pressures continue to subside," the agency said. It cited several recent bulk sales and auctions of problem real estate portfolios.
"Continued progress in Shawmut's asset quality should permit further improvement in performance measures leading to a ratings upgrade," Standard & Poor's added.
Washington Mutual Savings Bank: Standard & Poor's raised preferred stock to BBB-minus from BB-plus and uninsured certificates of deposit to BBB-plus/A2 from BBB/A2. …