Top Debt & Credit Rating Agency Actions (MS, WFC, JPM, C, F, GM, LINTA, TRI)

Today’s ratings actions have focused on commercial mortgage backed securities issued by several of the country’s largest banks — Morgan Stanley (NYSE: MS), Wells Fargo & Co. (NYSE: WFC), JPMorgan Chase & Co. (NYSE: JPM), and Citigroup Inc. (NYSE: C). Two automakers, Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM) also received ratings actions today, as did Liberty Interactive Corp. (NASDAQ: LINTA) and Thomson Reuters Corp. (NYSE: TRI).

Morgan Stanley (NYSE: MS) received upgrades on three of its commercial mortgage backed securities (CMBS) classes from Moody’s. Four other classes of CMBS included in the bank’s series 1999-WF1 package were affirmed at previously assigned ratings. The upgrades followed from Moody’s analysis that the cumulative expected loss has fallen from 8.6% to 4.5% of the current balance. The aggregate balance of the series is now $57.3 million from an original balance of $968.5 million at the time of securitization.

Wells Fargo & Co. (NYSE: WFC) subsidiary Wachovia Bank received downgrades on eight classes of CMBS in series 2006-C24 by Moody’s. Another 14 classes in the series were affirmed or confirmed and Moody’s also affirmed 16 classes in Wachovia’s CMBS series 2003-C7.

JPMorgan Chase & Co. (NYSE: JPM) received downgrades on six classes of CMBS series 2002-C2 and affirmations on 11 classes in the same series from Moody’s. The downgrades were due to higher expected losses of 6%, compared with 3.6% expected losses at the agency’s last review in December 2010.

Citigroup Inc. (NYSE: C) received a downgrade of 11 classes of its series 2006-C4 CMBS at Fitch Ratings. Two of the three largest loss contributors are in foreclosure. Six other classes in the series were affirmed. The total downgraded amount is more than $400 million on an aggregate original balance of $2.26 billion.

These actions could just represent a flurry of activity on some poorly performing loans, or they could be a signal that more write-downs on commercial lending could be in store.

Ford Motor Co. (NYSE: F) has had its ‘BB-‘ corporate credit watch put on CreditWatch with positive implications by Standard & Poor’s. The possible two-notch upgrade to ‘BB+’ depends on the company’s successful negotiations for a new four-year union contract. The company has also said that it could add up to 7,000 new jobs in the US over the next two years.

General Motors Co. (NYSE: GM) received a two-notch upgrade to its corporate credit rating, from ‘BB-‘ to ‘BB+’, at S&P. The rating outlook was also raised from ‘stable’ to ‘positive’. The upgrade follows yesterday’s United Auto Workers’ ratification a new four-year labor contract with GM.

Liberty Interactive Corp. (NASDAQ: LINTA) received a an upgrade to its corporate credit rating from ‘BB-‘ to ‘BB’ at S&P. The agency also removed company from CreditWatch Negative and affirmed its ‘stable’ outlook. The change stems from the spin-off of Liberty’s QVC, Inc.

Thomson Reuters Inc (NYSE: TRI) received a rating of ‘A-‘ on approximately $2.9 billion in 10-year unsecured notes maturing in 2013, 2014, and 2015. Thomson has also announced an offering of $350 million in 3.95% notes due in 2021. The company will use the proceeds to repay borrowing on its commercial paper that had been used to finance a repayment of CDN$600 million on 5.25% notes that matured in July 2011. Thomson also appointed a new COO yesterday, who could be in line to replace the CEO if Thomson doesn’t improve its performance in the financial services sector.

Paul Ausick