We believe Capital One's earnings and capital may continue to weaken because of mounting credit losses during the next two years. We have downgraded Capital One Financial Corp. and its subsidiaries. Future credit losses could exceed our base-case expectations in our stress tests given the weakening credit environment and Capital One's concentration in credit card lending. On June 17, 2009, Standard&Poor's Ratings Services lowered its long-term counterparty credit rating on Capital One Financial Corp. to 'BBB' from 'BBB+' and its long-term counterparty credit rating on Capital One Bank (USA) N.A., the bank subsidiary, to 'BBB+' from 'A-'. The 'A-2' short-term rating on the bank is affirmed. Ratings on other related subsidiaries also were lowered. The outlook is negative.
