S&P again lowers First Republic credit rating on ‘substantial’ challenges

S&P Global Ratings lowered its long-term issuer credit rating on First Republic Bank to "B+" from "BB+." The ratings remain on CreditWatch with negative implications, the agency said in a statement. "The deposit infusion from 11 U.S. banks, the company’s disclosure that borrowings from the Fed range from $20 billion to $109 billion and borrowings from the Federal Home Loan Bank increased by $10 billion, and the suspension of its common stock dividend collectively lead us to the view that the bank was likely under high liquidity stress with substantial deposit outflows over the past week," the S&P noted. It says that while the $30B in deposits that First Republic reported it will receive from 11 large U.S. banks should ease near-term liquidity pressures, it "may not solve the substantial business, liquidity, funding, and profitability challenges."