Signature Bank was closed by the state regulators on March 12.
Six other U.S. bank ratings are under review to downgrade.
Credits rating agency Moody’s downgraded the debt rating of recently collapsed New York-based Signature Bank deep into “junk territory.”
Moody’s rated Signature bank’s subordinate debt c, the grade indicates that the company is vulnerable to adverse economic conditions. It also stated that Moody’s withdraws the future ratings of the collapsed bank.
Withdraws the Ratings of Signature Bank
Moody’s withdraws the Signature Bank’s long-term and short-term local currency bank deposit rating of A2/prime-1, the long-term and short-term counterparty risk assessments rating of A3(cr) / P-2(cr), and the long-term and short-term local and foreign currency counterparty risk ratings of Baa1/prime-2.
Moody’s placed six other U.S. Banks for review to downgrade their ratings. The banks placed under review are First Republic Bank, Zion Bancorporation, Western Alliance Bancorp, Comerica Inc, UMB Financial Corp, and Intrust Financial Corporation.
Signature Bank is a New York-based financial institution that closed on March 12 by state regulators and said that keeping the bank open can threaten the entire financial system. This happened two days after the Silicon Valley Bank collapsed on March 10. The collapse occurred due to some inappropriate financial decisions that left it to struggle to meet customer withdrawal requests. This is the third-largest failure in the U.S. banking history.
The Signature Bank is just a victim of panic around the shutdown of Silicon Valley Bank. This causes the challenges that face small and mid-sized banks. The shutdown of Signature Bank is a blow to many professional service businesses that came to rely on it.