DBRS Upgrades and Subsequently Withdraws Colonial Bank Deposit Ratings

DBRS has today upgraded the deposit rating of Colonial Bank (the Bank), the lead banking subsidiary of Colonial BancGroup, Inc. (Colonial or the Company) to AA with Negative trend from CCC, Under Review with Negative implications, and subsequently discontinued and withdrew the rating. The AA deposit rating with Negative trend is consistent with the deposit rating of Branch Banking and Trust Company, which assumed all of Colonial Banks deposit accounts, whether or not insured by the FDIC. All other ratings were confirmed and remain Under Review with Negative Implications.

Today’s rating actions follows the seizure of Colonial’s assets by the Federal Deposit Insurance Corporation (FDIC) and the FDIC’s facilitated sale transaction of selected assets and liabilities of Colonial Bank to Branch Banking and Trust Company. It is DBRS’s opinion that a default is imminent on the senior debt, subordinated debt and preferred instruments at Colonial and the Bank, which were not included in this transaction. DBRS notes that Colonial’s ratings will go to D when it files for bankruptcy.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodologies are Rating Banks and Bank Holding Companies Operating in the United States, and Enhanced Methodology for Bank Ratings – Intrinsic and Support Assessments which can be found on our website under Methodologies.

This is a Corporate (Financial Institutions) rating.