The short-term issuer default ratings and debt ratings of The Bear Stearns Cos. and subsidiaries have been downgraded from F1-plus to F1 by Fitch Ratings, but their long-term ratings have been affirmed.The rating outlook has been revised from stable to negative. Fitch said it believes that Bear Stearns has been managing its balance sheet well through the "credit-stressed environment," but that its financial performance has been hurt by "management's decision to support a sponsored structured credit fund." The negative outlook stems from various factors, including "deteriorating housing metrics, credit risk repricing, widespread illiquidity, and diminished investment banking opportunities." Bear Stearns' near-term profitability is "expected to be pressured given Bear Stearns' franchise exposure to the total U.S. mortgage market," Fitch said. The rating agency can be found online at http://www.fitchratings.com.

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