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Thursday, November 19, 2009
Moody's May Downgrade $450 Bln Of Bank Debt
By Steve Goldstein
MarketWatch Pulse
LONDON -- Moody's Investors Service late Wednesday placed under review for possible downgrade the ratings of 775 hybrid and subordinated debt securities issued by 170 bank families in 36 countries following a change to its rating methodology for these instruments. That affects $450 billion of securities, it said. The reviews follow the rating agency's announcement that it has changed the way in which it rates these securities to take into account the fact that some recent government interventions in troubled banks have not helped, and have even been to the detriment of, the holders of these types of securities. For example, in some cases, support packages have been contingent upon a bank's suspension of coupon payments on these instruments as a means to preserve capital.
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