Moody, Fitch Cuts Capital One

By @ibtimes on

Capital One Financial Corps rating was downgraded on Friday.

Capital One, one of the largest issuers of MasterCard Inc and Visa Inc , credit cards,

affirms the investment grade, were Capital One's long-term issuer default rating of A-; its senior debt rating of A-; subordinated debt rating of BBB+; and preferred stock rating of BBB+.

In a separate statement said Fitch affirmed its rating, however, revised its outlook on the ratings to negative from stable, expressing concern that rising unemployment and deteriorating economic conditions could hurt the company's loan portfolio, and therefore reduce earnings in the near future.

Fitch believes that Capital One's capital position is solid, and should remain so even under more stressful operating conditions.

Recently, the company capital one posted a fourth-quarter net loss of $1.4 billion or $3.74 per diluted share. And reduced its quarterly dividend from $0.375 per share to $0.05 per share, beginning in the second quarter of 2009, will now have a dividend yield of 1.52%.

Moody also Believes Capital One faces continued elevated credit costs and profitability pressures as the U.S. economy remains weak.

Adding that, “We removed Capital One from our recommended list on Sept. 29, at a price of $54.55.”

Shares rose 19 cents or 1.45 percent at $13.33 on Friday trading.

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