Moody's upgrades Wells, U.S. Bancorp.

Moody's Investors Service on Friday upgraded the credit ratings of Wells Fargo & Co. and U.S. Bancorp, citing improving asset quality.

The rating agency lifted the ratings of both banks to A2 from A3 for senior debt and to A3 from Baa1 for subordinated debt. Their commercial paper ratings were raised to Prime-1 from Prime-2.

Moody's noted progress by Wells in reducing its portfolio of impaired loans, despite a soft California marketplace.

The agency cited U.S. Bancorp's improved asset quality, strong preprovision income and strengthened reserve coverage.

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