Standard & Poor's Corp. dropped its ratings on a number of BankAmerica Corp.'s debt issues Wednesday, citing decreased earnings, large loan losses and high operating expenses.
The action--which the bank holding company said it "strongly disagrees" with--reflects longstanding trends and is not expected to significantly affect the bank's cost of borrowing or the price of its shares.
The New York-based rating agency said it was lowering by one grade ratings on the company's senior and subordinated debt, preferred stock and several debt issues supported by a Bank of America letter of credit.
Analysts called the downgrading a "non-event" because it comes months behind market reaction to events at the bank.
"Typically, ratings are lagging indicators. The marketplace penalizes earlier," said Richard Fredericks of Montgomery Securities, a San Francisco brokerage house. "I suspect if there were to be an effect (on the bank's cost of funds), it has already shown up."