S&P Eyeing Block

The BBB-plus long-term counterparty credit rating on H&R Block Inc. has been placed on CreditWatch with negative implications by Standard & Poor's Ratings Services.The decision reflects the impact of deteriorating market conditions in the subprime mortgage industry on Block's subsidiary, Option One Mortgage Corp., S&P said. "We believe continued deterioration in the subprime market may affect Block's ability to dispose of its mortgage operations or extend existing warehouse funding agreements (current waivers expire April 27)," said S&P credit analyst Rian M. Pressman. "In addition, a decline in the value of its managed subprime mortgage portfolio could necessitate writedowns of residual assets, further reducing capital." S&P can be found online at http://www.standardandpoors.com.