Shares of First Republic Slump Following Credit Rating Downgrade
Shares of First Republic are sliding again Monday after a credit rating downgrade from S&P. On Sunday, the agency cut its credit rating to B+ from BB+, following last week’s decision to lower it to junk status.
The downgrade is seen as a sign that investors have little confidence in the company’s ability to meet financial obligations and pay back the debt on time. The news has sent shockwaves through the markets and caused shares of First Republic stock to tumble even further than before.
Analysts believe that this could be an indication of more trouble ahead for First Republic, as they may struggle with their liquidity position due to higher borrowing costs associated with their lower credit rating. This could lead them into further financial difficulties if not addressed quickly and effectively by management.
Investors should proceed cautiously when considering whether or not they want exposure in this sector at present given these recent developments surrounding First Republic’s finances and outlook going forward.Read more at CNBC