- NEW YORK (Reuters) - Moody's
Investors Service on Thursday cut its long-term rating outlook for J.P.
Morgan Chase & Co. to negative from stable, warning that weakness
in the asset quality of the bank's wholesale banking portfolio may lead
to more credit problems and lower net income.
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- The credit rating agency rates J.P. Morgan's senior unsecured
debt "Aa3," its fourth highest investment grade. A "negative"
outlook means that current conditions may lead to a downgrade, not that
a downgrade is imminent.
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- Moody's said J.P. Morgan, which is based in New York,
may suffer damage to its image and higher legal costs from its dealings
with Enron Corp. ENRNQ.PK, and that these could hurt business momentum
and profits as financial markets improve.
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- J.P. Morgan Chairman William Harrison said on Wednesday
the bank "acted properly and with integrity in all the Enron matters."
A day earlier, Congressional investigators charged the bank and Citigroup
Inc. with for years helping the energy trader hide debt that ultimately
led to its bankruptcy.
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- Moody's also said J.P. Morgan "has ample liquidity,"
and that "the credit, market, and liquidity risks of its derivatives
business are well controlled."
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- J.P. Morgan shares traded late Thursday at $22.35, down
95 cents, or 4.1 percent. They began the year at $36.35.
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