Moody’s downgraded New York Neighborhood Bancorp’s long-term debt score to Ba2 with most rankings on assessment for an extra downgrade.
The corporate set off a contemporary spherical of banking worries final week after it minimize its dividend. There are percolating fears about losses elsewhere within the struggling workplace sector.
The pile-on from Moody’s should not be a giant shock however this sort of factor tends to spiral. Moody’s mentioned the motion displays multi-facted monetary, risk-management and governance challenges. They mentioned NYCB’s elevated use of market funding could restrict flexibility. The corporate has excessive dependance on market-sensitive wholesale funding and has a smaller pool of liquid property.
Shares of NYCB fell 22% at this time and are down greater than 60% because the bother began final week.
For extra see: Darkish days are coming for US business actual property and the banks holding the loans