Ahead of the Bell: WaMu seeks buyer, report says

The Wall Street Journal is reporting, citing unnamed sources, that Washington Mutual approached Carlyle Group LLC and Blackstone Group LP about a possible deal. The Journal said it was not clear if a deal could be completed, and Washington Mutual is still looking at a potential sale to another financial institution.

On Wednesday night, S&P cut Washington Mutual's counterparty and preferred stock rating further into junk status.

"The downgrade was due to the increased likelihood that a potential sale of the company may not involve the whole company, which increases the risk of default for holding company creditors," S&P credit analyst Victoria Wagner, said in a statement.

Washington Mutual's counterparty rating was cut to "CCC/C" from "BB-/B." It's preferred stock rating was slashed to "CC" from "B-."

Despite the uncertainty surrounding Washington Mutual, its shares rose 29 cents, or 12.8 percent, to $2.55 in premarket trading.

Seattle-based Washington Mutual has been among the hardest hit banks since the credit crisis began last year because of a sharp rise in defaults in its mortgage portfolio. Potential buyers of the company could be hesitant to takeover the troubled mortgage portfolio.

S&P said that there are very few companies which are not constrained by mortgage problems themselves that could purchase a large bank such as Washington Mutual. That leaves open the possibility that only a partial sale could be completed, S&P said.

Washington Mutual increased its loss reserves to more than $8 billion during the second quarter to cover defaulting loans.