CORRECTED: Fitch downgrades PacWest debt to junk status

Credit rating agency Fitch Ratings on Thursday said it downgraded its long-term issuer default ratings for PacWest Bancorp
PACW,
+5.76%
to BB+ from BBB-. Fitch also cut its rating on Western Alliance Bancorp
WAL,
+0.20%
to BBB- from BBB+, and also downgraded the debt of Trustmark Corp.
TRMK,
-1.27%
to BBB from BBB+. All told, Fitch said it reviewed the debt on 14 small and mid-sized banks. The downgrades were largely limited to a subset of banks that experienced either deposit outflows notably in excess of peers or low tangible capital levels,” Fitch said. Overall, banks are expected to face greater headwinds from the tightening liquidity environment, although results will differ depending on each bank’s geography and business model, Fitch said. When companies receive a debt downgrade, the cost of interest payments on their debt may rise. PacWest stock is up 10.3% in its second straight day of big gains, while Western Alliance Bancorp is up by 1.1% and Trustmark is down 0.6%.