Countrywide's debt rating cut to 'Baa3'; retained on negative watch

Countrywide's debt rating cut to 'Baa3'; retained on negative watch - Moody's

	Published : Thu, 16 Aug 2007 15:09 By : Agencies Print this Story

MUMBAI (Thomson Financial) - Moody's Investors Service downgraded the senior debt ratings of US-based Countrywide Financial Corp and Countrywide Home Loans Inc to 'Baa3' from 'A3' and the deposits of Countrywide Bank FSB to 'Baa1' from 'A2,' after the country's largest mortgage lender earlier today drew on its credit line from 40 banks, in a move indicating how deep the lending crisis has become.

The company also announced that it will accelerate the shift of all mortgage production and related operations and funding to its bank subsidiary, Countrywide Bank FSB.

'These rating actions follow Countrywide's announcement that it has fully drawn its 11.5 bln usd in committed bank credit facilities due to severe disruptions in its access to unsecured debt, and to secured debt for assets other than treasuries, agencies and conforming prime mortgages,' Moody's said.

All of Countrywide's ratings remain under review for further downgrade, the rating agency said.

'The downgrade of Countrywide's ratings reflects significant diminution in the company's liquidity and debt market access due to the stresses being experienced in a wide array of single-family mortgage markets -- stresses that have caused Countrywide to fully draw its committed back-up bank lines,' Moody's said.

In addition, these difficult financial markets create potential challenges to Countrywide's franchise and leadership in the mortgage banking business, and further dislocations in the US single-family mortgage markets.

TFN.newsdesk@thomson.com

ran/ejp

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

Countrywide's debt rating cut to 'Baa3'; retained on negative watch - Moody's