NYCB shares
NYCB shares are in a death spiral

Moody's downgraded New York Community Bancorp's long-term debt rating to Ba2 with most ratings on review for a further downgrade.

The company set off a fresh round of banking worries last week after it cut its dividend. There are percolating fears about losses elsewhere in the struggling office sector.

The pile-on from Moody's shouldn't be a big surprise but this kind of thing tends to spiral. Moody's said the action reflects multi-facted financial, risk-management and governance challenges. They said NYCB's elevated use of market funding may limit flexibility. The company has high dependance on market-sensitive wholesale funding and has a smaller pool of liquid assets.

Shares of NYCB fell 22% today and are down more than 60% since the trouble started last week.

For more see: Dark days are coming for US commercial real estate and the banks holding the loans