S&P Downgrades CFC Counterparty Rating

Standard & Poor's Ratings Services has downgraded the counterparty credit rating of Countrywide Financial Corp. from A/A-1 to A-/A-2, while affirming its A/A-1 counterparty credit ratings on Countrywide Bank FSB and Countrywide Home Loans Inc..All ratings are on CreditWatch Negative. The downgrade reflects "the incremental liquidity and earnings stress, as well as our notching criteria and the fact that new debtholders will become subordinate to the operating company's debtholders as the company finalizes its restructuring phase," said S&P credit analyst Victoria Wagner. The affirmations reflect the "strong capital and credit profile" of Countrywide Bank and CHL's ongoing integration into the bank, which S&P said should improve its funding and liquidity profile. The dislocation of the mortgage capital markets has accelerated the integration, so that the bank will now be the primary source of earnings and hold the majority of the consolidated assets, S&P said. S&P can be found online at http://www.standardandpoors.com.