Standard & Poor's decision to cut Bank of America's long-term credit rating to A from A+ is hardly surprising. The biggest wild card now is not the toxic assets that drove so much concern earlier, but good, old-fashioned consumer credits that look shaky in the deteriorating economy. Of course further writedowns stemming from the acquisitions of Countrywide and Merrill Lynch also loom as a possibility.

The rating firm also cut the bank's hybrid capital rating by four notches to BB-, three steps away from junk status; it reasons that the bank may be forced to exercise its option not to pay dividends, reports the Financial Times. Citigroup has already suspended dividends on its preferred stock as part of the recent recapitalization that resulted in the government taking 36 percent in the common shares. It may frustrate Bank of America to be lumped in with Citigroup, but that is how the world views it. 

For more:
- here's a Financial Times article

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