DBRS downgrades Colonial BancBroup

DBRS said it downgraded all ratings of Colonial BancGroup, Inc. and its related entities to D and removed the ratings from Under Review with negative implications.

The ratings have been withdrawn.

The downgrade follows Colonial's notification of an event of default for its 8 7/8% subordinated notes due 2038, floating-rate junior subordinated deferrable interest debentures due 2033 and 7.785% preferred securities.

DBRS anticipates that the trustee or holders of more than 25% in principal amount of the floating-rate debentures and the preferreds will request payment in full, and the agency believes that Colonial's ability to satisfy these obligations is severely limited.

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