S&P cuts BofA rating, may cut again, Moody's may cut

NEW YORK (Reuters) - Standard & Poor's on Monday cut its ratings on Bank of America, and said it may cut them again, and Moody's Investors Service also placed the bank on review for downgrade after it said it will purchase Merrill Lynch for $50 billion.

S&P also placed its ratings on Merrill Lynch on watch to be raised, lowered or left unchanged.

"This opportunistic acquisition takes place on the heels of BofA's recent July 1 acquisition of troubled mortgage lender Countrywide Financial Corp," S&P said in a statement.

"In our view, the purchase of Merrill will place further pressure on BofA's capital, already strained by the Countrywide acquisition," S&P added.

S&P cut Bank of America's counterparty credit rating one notch to "AA-minus," the fourth highest investment grade, from "AA." It rates Merrill Lynch "A," the sixth highest investment grade.

Moody's rated Bank of America "Aa2," the third highest investment grade.

(Reporting by Karen Brettell; Editing by James Dalgleish)