WaMu Shares Sink on Analyst's Concerns

Wall Street is also becoming increasingly concerned that the nation's largest thrift won't be able to pay its debt.

Following the release of earnings late Tuesday, Standard & Poor's downgraded the Seattle company's counterparty credit rating to one spot above junk, while Moody's Investors Services said it was considering lowering WaMu's debt ratings to junk status.

"We can't fault uninsured depositors for being cautious; they aren't being paid to take on equity-like risks," Shanley later said in the note.

In a nutshell if WaMu's ratings were to fall to junk status, "the loss of investment grade ratings would likely result in further reductions in the sources of liquidity available to the company; may result in collateral or margining requirements under derivative and repurchase agreements with counterparties, which could increase the company's funding costs and further reduce its earnings and liquidity; and could affect the company's ability to do normal business operations, in ways that could be material," Gimme Credit cited WaMu's annual filing as saying.

Shares closed down 62 cents to $4.03 on Thursday.