$490-million sale of its North American servicing and mortgage banking businesses, its announcement of a $1.6-billion loss in the second quarter and its indicating that it could file for a Chapter 11 reorganization. The ratings agency had cut Capmark's rating to Caa1 last April.

In a release from Moody's, the agency says a sale of Capmark's servicing and mortgage banking businesses "would remove key sources of income needed to service and repay unsecured debt obligations, while impairing the value of its franchise and remaining businesses."

Moody's says the downgraded rating also stems from "the material deterioration in asset quality, the diminished size of its unencumbered asset portfolio, and the potential for additional required support--possibly in cash and/or assets--to bolster Capmark Bank," Capmark's industrial banking unit headquartered in Salt Lake City. "As a result, Moody's believes that the unsecured lenders and bondholders, either in a default or a restructuring scenario, would experience substantial losses. The C rating reflects the potential loss severity."

In its release, the ratings agency explains that its revised rating for Capmark was derived "by evaluating factors we believe are relevant to the credit profile of the issuer." These include: the business risk and competitive position of the company versus others within its industry, the capital structure and financial risk of the company, the projected performance of the company over the near to intermediate term and Capmark management's track record and tolerance for risk. "These attributes were compared against other issuers both within and outside of Capmark's core industry and the company's ratings are believed to be comparable to those of other issuers of similar credit risk," according to Moody's.