-Well, this just sucks if you are WAMU or their investors. One would think they would check to see if the ratings would improve before you go throw $7 BILLION into a failing bank. This reminds me of the stupid investment in MBIA at $31 per share that is now worth a THIRD of that. You have not heard the end of this story...what is that saying about 'catching falling knives'? Dummies. -Mr Mortgage
NEW YORK--(BUSINESS WIRE)--Today's announcement by Washington Mutual, Inc. (NYSE: WM) of a series of capital measures, including the sale of $7 billion in new Tier I capital to a group of institutional investors and the anticipated reduction in the quarterly common dividend to $0.01 per share, is unlikely to affect the credit ratings of WM, according to Fitch Ratings.
Concurrent with the new capital, WM also announced preliminary results for first-quarter 2008 (1Q'08) which include a sizeable net loss of approximately $1.1 billion, attributable primarily to a sharp rise in the provision for credit losses to approximately $3.5 billion, more than half of which will go toward building the reserve.
Fitch currently rates WM as follows:
-Long-term IDR 'BBB';
-Short-term IDR 'F2';
-Rating Outlook Negative.