Standard & Poor's Ratings Services upgraded E-Trade Financial Corp. and its banking operations on Wednesday.

The ratings agency had downgraded E-Trade twice in the past three months amid the company's debt woes and a $1.74 billion debt exchange, which had been viewed by S&P as a distressed exchange offering. E-Trade was raised to CCC, from CC; E-Trade Bank was also raised one step, to B-minus, moving its rating out of highly speculative territory. It had gotten a four-notch downgrading in May on concerns about E-Trade's debt levels and the bank's loan book.

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