S&P cuts New York Community Bancorp to junk

S&P said it lowered its long-term issuer credit rating on New York Community Bancorp to BB+ from BBB-. The outlook is stable.

S&P also lowered the issuer credit rating on its main bank subsidiary, New York Community Bank, to BBB-/A-3 from BBB/A-2. The outlook is stable.

“Our downgrade follows the news that NYCB plans to repurchase up to $300 million common shares funded by a like amount of subordinated debt. While opportunistic, we view the move to reduce its capital cushion as financially aggressive because we expect the company to face more earnings pressure from rising interest rates and its liability-sensitive balance sheet,” S&P said in a news release.

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