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Moody’s downgraded the long term senior debt (to Aa2 from Aa1) of Bank of America Corporation and placed a negative rating outlook on the company. At the same time, Moody’s lowered the bank financial strength rating of Bank of America to A- from A, also with a negative outlook, but affirmed the bank’s Aaa rating for deposits. Today’s downgrades address BAC’s relatively weak capital position, despite a substantial capital raise earlier this year. Given a challenging operating environment, a weakened outlook for earnings, and a heavy dividend burden, BAC’s equity ratios are unlikely to expand meaningfully in the near term.

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Technorati Tags: Aa1, Aaa, Address, Bac, Bank America, Bank Of America, Bank Of America Corporation, Bofa, Capital Position, Dividend, Downgrades, Earnings, Equity Ratios, Financial Strength Rating, Moody Bank, Negative Outlook, Operating Environment, Senior Debt, Substantial Capital