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The Troubled Lender NYCB Is Put Under “Review For Upgrade” By Moody’s

Student Loan Forgiveness
Student Loan Forgiveness; Source- MARCA

According to a report released on Thursday by the rating agency Moody’s, the company has modified its assessment of New York Community Bancorp (NYCB) (NYCB.N), opening a new tab labeled “review for upgrade” instead of “review for downgrade”.

Common Equity Tier

The bank said on Wednesday that it had raised $1 billion from investors, including Liberty Strategic Capital, the former U.S. Treasury Secretary Steven Mnuchin’s company, and appointed former Comptroller of the Currency Joseph Otting as its new CEO. This announcement coincided with the bank’s new rating.

The capital issue will enhance NYCB’s common equity tier 1 (CET1) ratio, a crucial indicator of financial health, to 10.3% on a proforma basis, assuming full conversion of the preferred equity to common, according to Moody’s revised review approach.

Raising Credit Loss

Moody's

Source- MARCA

The NYCB’s “planned capital raise could help stabilize its franchise following the tumultuous series of events that have occurred in recent weeks, and could improve its creditworthiness,” according to Moody’s Investors Service. Additionally, the agency still thinks NYCB would need to raise its credit loss reserves even further.

Following the bank’s announcement on Thursday that deposits had dropped by 7% and that it was considering receiving bids from non-bank entities for some of its loans, NYCB’s new CEO stated earlier in the day that the corporation will present a new business strategy the following month.

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