Flagstar Bank Credit Ratings Upgraded to Investment Grade
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 hours ago
0mins
Source: Yahoo Finance
- Credit Rating Upgrade: Moody's has upgraded Flagstar Bank's Long-Term Deposit rating from Ba1 to Baa3 and Short-Term Deposit rating from Not Prime to Prime-3, marking the bank's first attainment of investment-grade status, reflecting significant improvements in its financial performance.
- Financial Performance Improvement: The rating upgrade is attributed to Flagstar's successful remediation of previously identified material weaknesses in internal controls over financial reporting, and its progress towards sustainable profitability, with expectations of a stable Return on Average Assets above 0.5%, enhancing market confidence.
- Expanded Market Impact: The attainment of investment-grade deposit ratings is expected to enhance Flagstar's funding profile, expanding access to corporate, institutional, and municipal deposit relationships, thereby further supporting its business growth and market share increase.
- Strategic Significance: This rating upgrade follows a similar action by Fitch in March, indicating Flagstar's ongoing efforts to strengthen its balance sheet and improve credit quality, showcasing its robust growth potential in a competitive banking landscape.
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Analyst Views on MCO
Wall Street analysts forecast MCO stock price to rise
10 Analyst Rating
8 Buy
2 Hold
0 Sell
Strong Buy
Current: 436.250
Low
526.00
Averages
586.50
High
660.00
Current: 436.250
Low
526.00
Averages
586.50
High
660.00
About MCO
Moody's Corporation is a global integrated risk assessment company. It is a global provider of research and insights; data and information, and decision solutions, which help companies make decisions. Its MA segment provides data, intelligence and analytical tools to help business and financial leaders make decisions. MA consists of a premier fixed income and economic research business (Research & Insights); a data business powered by databases on companies and credit (Data & Information), and three cloud-based subscription businesses serving banking, insurance and KYC workflows (Decision Solutions). Its MIS segment is a global provider of credit ratings, research, and risk analysis. It publishes credit ratings and provides assessment services on a wide range of debt obligations, programs and facilities, and the entities that issue such obligations in markets worldwide, including various corporate, financial institution and governmental obligations, and structured finance securities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Teleconference Invitation: The company invites investors to join a teleconference led by CEO Rob Fauber and CFO Noémie Heuland to discuss the Q1 results, enhancing transparency and investor confidence.
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- Financial Performance Improvement: The rating upgrade is attributed to Flagstar's successful remediation of previously identified material weaknesses in internal controls over financial reporting, and its progress towards sustainable profitability, with expectations of a stable Return on Average Assets above 0.5%, enhancing market confidence.
- Expanded Market Impact: The attainment of investment-grade deposit ratings is expected to enhance Flagstar's funding profile, expanding access to corporate, institutional, and municipal deposit relationships, thereby further supporting its business growth and market share increase.
- Strategic Significance: This rating upgrade follows a similar action by Fitch in March, indicating Flagstar's ongoing efforts to strengthen its balance sheet and improve credit quality, showcasing its robust growth potential in a competitive banking landscape.
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- Teleconference Invitation: The company invites investors to join a teleconference led by CEO Rob Fauber and CFO Noémie Heuland to discuss the Q1 results, enhancing transparency and investor confidence.
- Meeting Time and Duration: The teleconference is scheduled for April 22, 2026, at 9:00 a.m. ET, lasting one hour, offering in-depth financial analysis and future outlook.
- Replay Service: A replay of the call will be available immediately after the meeting on April 22, 2026, and will last until April 29, ensuring that investors who cannot attend live can access critical information.
See More
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- Financial Performance Improvement: The rating upgrade is attributed to Flagstar's successful remediation of previously identified material weaknesses in internal controls over financial reporting, and its progress towards sustainable profitability, with expectations of a stable Return on Average Assets above 0.5%, enhancing market confidence.
- Expanded Market Impact: The attainment of investment-grade deposit ratings is expected to enhance Flagstar's funding profile, expanding access to corporate, institutional, and municipal deposit relationships, thereby further supporting its business growth and market share increase.
- Strategic Significance: This rating upgrade follows a similar action by Fitch in March, indicating Flagstar's ongoing efforts to strengthen its balance sheet and improve credit quality, showcasing its robust growth potential in a competitive banking landscape.
See More
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- Structure and Safeguards: The bond is divided into Series A-1 and A-2, both featuring a 1.60x collateral buffer and a 1.40x liquidation trigger to mitigate Bitcoin's price volatility, ensuring investor capital protection.
- Investor Return Mechanism: The Series A-2 bonds allow investors to receive 15% of any Bitcoin price increase after all principal and interest are repaid, despite Bitcoin's year-to-date decline of over 21%, highlighting market uncertainty.
- Market Reaction and Trends: This bond issuance reflects the growing acceptance of cryptocurrencies in mainstream finance, especially as Fannie Mae partners with Coinbase to offer mortgage programs using crypto as collateral, with Moody's stock slightly rising in pre-market trading and market sentiment shifting to neutral.
See More
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- Weak Labor Market: The latest jobs report reveals a loss of 92,000 jobs, significantly below economists' expectations of a gain of 59,000, with the unemployment rate ticking up to 4.4%, indicating a downward trend that reflects economic slowdown.
- GDP Revision: U.S. GDP growth has been revised down from 1.4% to 0.7%, showcasing a lack of economic momentum, and coupled with inflation remaining above the Federal Reserve's 2% target, this adds to market uncertainty.
- Impact of Energy Prices: The Iran war has disrupted 20% of the world's crude oil supply, pushing prices to nearly $120 per barrel, and historically, every U.S. recession has been preceded by spikes in energy prices, suggesting that unless the situation resolves quickly, recession probabilities may rise further.
See More
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- Weak Labor Market: The latest jobs report reveals a loss of 92,000 jobs, starkly contrasting with economists' expectations of a gain of 59,000, while the unemployment rate has ticked up to 4.4%, indicating economic slowdown that could dampen consumer confidence and spending.
- GDP Downgrade: Recent GDP growth has been revised down from 1.4% to 0.7%, reflecting sluggish economic performance, and coupled with inflation remaining above the Federal Reserve's 2% target, this raises concerns about the economic outlook, potentially leading to investor caution.
- Oil Price Impact: The Iran war has disrupted 20% of global crude oil supply, pushing prices close to $120 per barrel, which could elevate recession odds further; historical data shows that every recession since World War II has been preceded by spikes in fuel prices, increasing market uncertainty.
See More
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- Plastic Price Surge: Stanislav Krykun, CEO of DST-Pack, reports a 15% price increase from Chinese plastic suppliers due to rising raw material costs and market uncertainty, which is expected to lead to higher packaging costs that will ultimately affect consumer prices.
- Holiday Product Cost Reevaluation: Krykun notes that with increasing orders for the 2026 Christmas season, costs for packaging projects have been recalculated, particularly as the rising prices of molded plastic trays will directly impact clients' production budgets.
- Petrochemical Supply Shock: Atsi Sheth, chief credit officer at Moody's, highlights that the petrochemical industry is facing a supply shock, with oversupply and insufficient demand leading to downgrades for producers, which is expected to exacerbate consumer price inflation, particularly affecting lower-income groups.
- Long-Term Market Uncertainty: Peter Swartz, chief science officer at supply chain analytics firm Altana, states that the market is pricing in uncertainty, and long-term price increases are expected to become the norm, prompting businesses to invest in diversification to tackle future challenges.
See More
