R&G Financial Downgraded

The long-term issuer default ratings of R&G Financial Corp., San Juan, Puerto Rico, and R&G Mortgage have been lowered from BB to BB-minus by Fitch Ratings.Fitch also downgraded R&G Financial's preferred stock from B to B-minus, lowered various ratings of other R&G subsidiaries such as R-G Premier Bank and R-G Crown Bank, and maintained its negative rating outlook on the companies. The rating agency said the actions stemmed from the longer-than-expected delay in releasing audited financial statements, regulatory and legal issues, R&G's deteriorating operational results in 2006, and the mix and level of its capitalization. "R&G is lagging its Puerto Rican peers in the resolution of its accounting issues," Fitch said. Fitch can be found online at http://www.fitchratings.com, and R&G Financial can be found at http://www.rgonline.com.