State Street Corp. said late Monday it began a $2.5 billion common stock offering, becoming the latest financial firm to seek additional investment.
State Street's investors have been concerned with the deteriorating market value of securities held in its investment portfolio. Fitch Ratings warned in April that it could downgrade State Street's credit ratings as a result.
In April, State Street said a loss on its investment portfolio implied by market prices increased to $3.2 billion in the quarter from $1.1 billion at the end of last year.
The bank has yet to recognize the losses and doesn't have to unless it concludes the decline in value will persist. But the case for not recognizing them gets harder to make the longer the assets' prices remain depressed, and Fitch has said State Street may have to take "a significant portion" of the losses over the next few quarters.
