R&G Financial Downgraded

The long-term issuer default ratings of R&G Financial Corp., San Juan, Puerto Rico, and R-G Mortgage Corp. have been lowered from BBB-minus to BB by Fitch Ratings.Fitch also downgraded R&G Financial's preferred stock from BB to B, lowered various ratings of other R&G subsidiaries such as R-G Premier Bank and R-G Crown Bank, and assigned a rating outlook of negative. The rating agency said the actions stemmed from various concerns, including a longer-than-expected delay in releasing audited financial statements for fiscal year-end 2005 and quarterly financials for 2006, regulatory restrictions on subsidiaries, the company's operational performance in 2006, and the mix and level of its capitalization. In January, R&G Financial announced the resignation of Ramon Prats as vice chairman and president, and as president of R-G Mortgage and R-G Premier Bank, in connection with an investigation by the company's audit committee. The probe related to the company's need to restate its earnings for 2002, 2003, and 2004. Fitch can be found online at http://www.fitchratings.com, and R&G Financial can be found at http://www.rgonline.com.