Fitch Comments on Zions Bancorporation TRUPs CDO Impairment Announcement
CHICAGO -- December 07, 2012
Zions Bancorporation (ZION) recently announced that it will likely take
additional impairment (OTTI) charges on its trust preferred (TRUPs)
collateralized debt obligations (CDOs) in the fourth quarter of 2012 (4Q'12)
given recent discussions with federal regulators regarding valuation
assumptions, according to Fitch Ratings. ZION estimates that this non-cash
charge would likely not exceed $100 million.
This additional OTTI is outside of Fitch's existing expectations. While Fitch
would note that the OTTI is non-cash and potentially pulls forward future OTTI
into the current period, to the extent that this charge causes a material net
income loss in 4Q'12 or constrains the incremental capital build of the
company, Fitch may consider revising its Rating Outlook to Stable from
ZION is a $53 billion bank holding company operating a decentralized business
model through approximately 500 offices in 10 Western and Southwestern states:
Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah
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Justin Fuller, CFA
70 West Madison
Chicago, IL 60602
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