S&P downgrades First Republic's rating on deposit outflows risk; stock dips 16%
The rating agency has placed the First Republic on ‘CreditWatch with negative implications.’
In its rationale report, S&P said, ‘we believe the risk of deposit outflows is elevated at First Republic--despite actions by federal regulators.’
Following the liquidity concerns in US banks, S&P Global Rating downgraded its long-term issuer credit rating on First Republic Bank to 'BB+' from 'A-'. The rating agency also trimmed its senior unsecured issue rating to 'BB+' and the subordinated and preferred stock issue ratings to 'BB-', and 'B', respectively. Further, it has placed the First Republic on "CreditWatch with negative implications." The main concern in the First Republic would be the risk of deposit outflows.