Fitch said it is worried about the size of B of A's litigation risk as well as its weaker capitalization, when compared with its competition. Fitch announced the possible cut on Wednesday.
At the time of the June settlement related to mortgage-backed securities issued by Countrywide, Fitch affirmed B of A ratings, based on expectations that it would clarify potential losses because of representations and warranties and provide clarity.
But there is uncertainty regarding court approval of the settlement. In addition, B of A is facing other legal issues, including suits or potential litigation involving American International Group, state attorney generals and the Federal Housing Finance Agency.
Fitch said it is planning to meet with B of A and any affirmation of the current "a-" viability rating could depend on favorable resolution of the litigation risk, among other factors.
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