Fitch Downgrade's BoA's Debt Ratings

In the wake of the poor earnings report and disclosures about additional government assistance at Bank of America Corp., Charlotte, N.C., Fitch Ratings has cut the long-term issuer default rating on the company's bank subsidiaries from "AA-" to "A+". The parent company's long-term IDR, as well as the IDR of newly acquired Merrill Lynch & Co., were affirmed at "A+". Furthermore, the preferred stock ratings were cut from "A" to "BBB" and placed on ratings watch negative. The actions, Fitch said, are because the combined BofA/Merrill Lynch would experience ongoing operating and asset quality pressures in the current environment. "The actions, which result in a convergence of BofA's IDR at its support floor, also reflect the fact that government support has been forthcoming and additional support will likely be provided in the future if necessary, due to BofA's prominence in the global and domestic banking system," said Fitch. Merrill Lynch's individual rating has been cut to "F", which Fitch said reflects its "view that this entity would likely not have survived absent assistance provided by the U.S. Treasury."