First Republic stock tumbles toward a record low after S&P slashes credit rating by another 3 notches

Shares of First Republic Bank FRC, -32.80% tumbled 14.6% toward a record low Monday, after the troubled bank had its credit rating slashed deeper into junk territory over the weekend, as S&P Global Rating said the $30 billion rescue package received last week doesn’t solve the “substantial liquidity and funding challenges. S&P said Sunday that it cut its rating on First Republic by another three notches to B+, just four days after cutting it by four notches to BB+, the first speculative grade, or junk rating, from A-. “The $30 billion in deposits that First Republic reported it will receive from 11 large U.S. banks should ease near-term liquidity pressures, but it may not solve the substantial business, liquidity, funding, and profitability challenges that we believe the bank is now likely facing,” S&P said. A “B” rating at S&P means the entity is “more vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments.” The stock was on track to open below the $20 level, below the Oct. 3, 2011 record low close of $22.48.

Source: finance.yahoo.com