S&P Downgrades Indymac

Citing "deteriorating housing markets," Standard & Poor's Ratings Services has lowered its ratings on Indymac Bancorp and its subsidiaries. S&P lowered its counterparty credit rating on Indymac from BB-plus/B to B/C and downgraded the preferred stock of Indymac and IndyMac Bank FSB to D, pointing to the recent suspension of dividend payments on the preferred stock. The corporate credit ratings on the bank and the holding company have been placed on CreditWatch with negative implications. "This action was taken in response to our growing concerns about Indymac's exposure to deteriorating housing markets, which has driven nonperforming assets to very high levels and resulted in continued credit-related losses that have eroded capital," said S&P credit analyst Robert B. Hoban Jr. S&P said it is concerned that "continued increases in problem assets and increasingly high chargeoff levels will leave the company unable to get ahead of its asset quality problems. Because Indymac's profitability was already depressed by the cyclical decrease in mortgage finance activity and reduction in its gain-on-sale margin, we expect the company to continue to suffer quarterly losses for at least the rest of 2008." The rating agency can be found online at http://www.standardandpoors.com.