DBRS Downgrades and Withdraws Colonial BancGroup, Inc.’s Ratings

DBRS has today downgraded all ratings of Colonial BancGroup, Inc. (Colonial or the Company), and its related entities to D and subsequently withdrew the ratings. Moreover, DBRS has removed the Under Review with Negative implications on all ratings.

Today’s rating actions follow Colonial’s notification through an 8-K, of the triggering of an “Event of Default” for its 8.875% Subordinated Notes due 2038, its Floating Rate Junior Subordinated Deferrable Interest Debentures Due 2033, and its 7.785% Preferred Securities. Upon the “Event of Default”, all principal, including any interest accrued but unpaid (specific to the Junior Sub. Debt and Preferred Securities) becomes due. DBRS anticipates that the trustee or holders with more that 25% in aggregate principal amount of the Floating Rate Junior Subordinated Debentures, and the Preferred Securities will request payment in full. DBRS believes that Colonial’s ability to satisfy these obligations is severely limited.

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.