Moody's cuts Citizens Republic

Moody's Investors Service said it downgraded the ratings of Citizens Republic Bancorp, Inc. (issuer rating to B2/Not-Prime from Baa3/Prime-3, subordinated debt to Caa2 from Ba1) and its subsidiaries, including its lead bank, Citizens Bank, Michigan (bank financial strength to D- from C-, deposits to Ba3/Not-Prime from Baa2/Prime-2), and Citizens Funding Trust I (trust preferred securities to Caa2 from Ba1).

Following the downgrade, holding company subordinated debt and trust preferred ratings are under review, direction uncertain, the agency said.

All of Citizens' other ratings remain under review for possible downgrade, Moody's noted.

Moody's said that its rating action follows the announcement that Citizens commenced an offering to exchange common stock for holding company subordinated debt and trust preferred securities.

The downgrade of Citizens' financial strength rating to D- reflects the increase in Moody's loss expectations for Citizens' loan portfolio.

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