2008-07-08 23:46:06 -
- Fitch Ratings has downgraded the long-term Issuer Default Ratings (IDRs) of Indymac Bancorp Inc. (IMB) and its wholly owned bank subsidiary, Indymac Bank FSB (the bank) as follows:
Indymac Bancorp Inc.
--Long-term IDR to 'CC' from 'B-'.
Indymac Bank FSB
--Long-term IDR to 'CCC' from 'B'.
Today's downgrade follows IMB's disclosure that, according to its regulators, the bank is no longer 'well capitalized'. Concurrent with this rating action, Fitch has removed all ratings from Rating Watch Negative. The Rating Outlook is Negative for IMB. A complete list of rating actions is provided at the end of this release.
Today's action reflects IMB's weakening capital position and likelihood that capital will not be raised
from external sources. Internal capital generation is also significantly impaired as existing businesses are not profitable, new loan production has been curtailed and the company faces additional write-downs on its mortgage securities portfolio. IMB's 'E' Individual rating reflects a bank with very serious problems, which either requires or is likely to require external support. Fitch also notes that the bank would need to get FDIC approval to accept or renew brokered deposits, the vast majority of which are federally insured.
Fitch continues to also differentiate the ratings of IMB and the bank as they have distinct regulatory oversight and legal structures. Fitch's downgrade of preferred stock issued by IMB and the bank reflects the uncertain recovery prospects for preferred shareholders which are driven by the priority claim on IMB's mortgage loans and securities by the Federal Home Loan Bank (FHLB) of San Francisco and obligations to the bank's insured depositors. Accordingly, Fitch has assigned average Recovery Ratings (RRs) to the bank's uninsured deposits, which represents approximately $720 million, or 4% of total deposits.
Fitch may downgrade IMB's ratings further should the company default on its obligations or is placed into receivership.
Fitch has downgraded the following ratings and removed them from Rating Watch Negative:
Indymac Bancorp Inc.
--Long-term IDR to 'CC' from 'B-';
--Individual to 'E' from 'D/E'.
Indymac Bank FSB
--Long-term IDR to 'CCC' from 'B';
--Long-term deposits to 'CCC/RR4' from 'B/RR4';
--Preferred stock to 'C/RR6' from 'CCC-/RR/6'
--Individual to 'E' from 'D/E'.
Indymac Capital Trust I
--Preferred stock to 'C/RR6' from 'CCC-/RR/6'.
Fitch has also affirmed the following ratings:
Indymac Bank FSB
--Short-term IDR at 'C';
--Short-term deposits at 'C';
--Support at '5';
--Support Floor at 'NF'.
Indymac Bancorp Inc.
--Short-term IDR at 'C';
--Support at '5';
--Support Floor at 'NF'.
Fitch rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Fitch Ratings
Vincent Arscott, CFA, 212-908-0872
Christopher Wolfe, 212-908-0771
Kenneth Reed, 212-908-0540 (Media Relations)
