(Bloomberg) — New York Community Bancorp’s credit grade was cut to junk by Moody’s Investors Service less than a week after the regional lender alarmed shareholders by slashing payouts and stockpiling reserves to cover troubled loans tied to commercial real estate.
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The bank is facing “multifaceted” financial risks and governance challenges, Moody’s wrote in a report Tuesday, lowering the company’s long-term issuer rating two notches below investment grade to Ba2. The ratings firm said it could go further if conditions deteriorate.
The stock tumbled about 60% to the lowest level since 1997, after the bank announced plans last week to slash dividends and beef up reserves to prepare for stiffer capital rules, following acquisitions that catapulted its assets beyond $100 billion. The measures followed mounting behind-the-scenes pressure from the Office…
