NYCB’s Credit Rating Raised by Moody’s on Mnuchin Capital Infusion

(Bloomberg) — New York Community Bancorp’s credit rating was raised by Moody’s Investors Service after the embattled lender landed a capital injection from investors led by Steven Mnuchin, though the grade remained in junk territory.

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Moody’s lifted the bank’s long-term issuer rating to B2 from B3, still five levels below investment grade. The credit-ratings firm also cited in its rationale for the upgrade that the lender’s annual report included an unqualified audit opinion, meaning the auditor considers the company’s financial statements to be fairly represented. Moody’s had downgraded NYCB to junk in February, and cut the rating even further earlier this month.

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The capital injection and audit report “have put the bank on a firmer footing following the various adverse developments that have affected it since its Jan. 31 announcement of a significant quarterly loss,” Moody’s said in a statement Friday. “At the same time, NYCB still faces a number of key decisions in its strategic development and in effectively addressing its fundamental challenges in governance, financial profile, risk management and internal controls.”

The outlook for NYCB’s rating was changed to positive, Moody’s said, after it had been under review.

Shares of Hicksville, New York-based bank rallied 14% this week as the $1 billion-plus equity deal was completed.

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