By The Financial District
Mar 23, 20231 min
First Republic Bank saw its credit ratings downgraded deeper into junk status by S&P Global, which said the lender's recent $30 billion deposit infusion from 11 big banks may not solve its liquidity problems, Jonathan Stempel and Anurudh Saligrama reported for Reuters.
Photo Insert: The downgrade by S&P was the second in four days for First Republic, which previously held an "A-minus" credit rating.
S&P cut First Republic's credit rating three notches to "B-plus" from "BB-plus," and warned that another downgrade is possible. Other ratings were also lowered.
The agency said First Republic likely faced "high liquidity stress with substantial outflows" last week, reflecting its need for more deposits, increased borrowings from the Federal Reserve, and the suspension of its common stock dividend.
It said that while the deposit infusion should ease near-term liquidity pressures, it "may not solve the substantial business, liquidity, funding, and profitability challenges that we believe the bank is now likely facing."
Sunday's downgrade by S&P was the second in four days for First Republic, which previously held an "A-minus" credit rating.