Fitch Affirms PNC Financial Services Group; Outlook Stable.

CHICAGO -- Fitch has affirmed all ratings of PNC Financial Services Group Inc. (PNC) and its affiliates. The Rating Outlook remains stable. This action follows an announcement that PNC's majority-owned subsidiary BlackRock, Inc. (BLK) will enter into a business combination with Merrill Lynch & Co.'s (MER; rated 'AA-' by Fitch) Merrill Lynch Investment Management (MLIM). A complete list of ratings follows at the end of this release.

Under the proposed transaction, BLK will issue new shares of stock to MER in exchange for MLIM. This will provide MER with 49% ownership of the combined BLK/MLIM. PNC's existing 70% stake in BLK will be reduced to about 34% of this larger entity, and the publicly traded portion of BLK will decline from 30% to about 15%. The transaction is expected to close in the third-quarter 2006.

The BLK/MLIM combination will create one of the world's largest investment managers, with Assets under Management (AUM) of nearly $1 trillion. In addition to its large scale, the combination will feature a diversified AUM base, as MLIM brings greater exposure to equity investments and retail clients, while BLK provides a strong position in fixed income investing and institutional clients. The transaction is expected to be significantly accretive to BLK's earnings per share.

The transaction will also have a significant effect on PNC, although there is no direct cash inflow. In accounting for this transaction, PNC will revalue part of its historical cost basis in BLK to reflect the higher market value associated with this transaction. Accordingly, PNC will record a large taxable gain, with the after-tax portion of the gain increasing tangible common equity. The transaction also will be somewhat accretive to PNC's earnings, although tax considerations make it less accretive to PNC than to BLK.

Fitch views the proposed transaction as a net positive for PNC. While PNC will give up direct control of the existing BLK, it will receive in return a smaller share of an expanded company that has the potential of being one of the dominant players in the industry. In assessing PNC's long-term financial position, Fitch will evaluate how much of the capital increase is retained, and how much is returned to shareholders via higher stock repurchases and dividends.

Fitch has affirmed the following rating with a Stable Rating Outlook:

PNC Financial Services Group

-- Long-term senior 'A';

-- Long-term subordinated 'A-';

-- Preferred stock 'A-'

-- Short-term 'F1';

-- Individual 'B/C';

-- Support '5'.

PNC Bank N.A.

-- Long-term deposits 'A+';

-- Long-term senior 'A';

-- Long-term subordinated 'A-';

-- Short-term senior 'F1';

-- Short-term deposits 'F1';

-- Individual 'B/C';

-- Support '4'.

PNC Bank Delaware

-- Long-term deposits 'A+';

-- Long-term senior 'A';

-- Short-term senior 'F1';

-- Short-term deposits 'F1';

-- Individual 'B/C';

-- Support '4'.

PNC Funding Corp.

-- Long-term senior 'A';

-- Long-term subordinated 'A-';

-- Short-term 'F1';

-- Individual 'B/C';

-- Support '5'.

PNC Financial Corp.

-- Long-term subordinated 'A-'.

Riggs National Corporation

-- Long-term subordinated 'A-'.

PNC Capital Trust C, D

PNC Institutional Capital Trust A, B

Riggs Capital

Riggs Capital II

UNB Capital Trust I

-- Trust preferred 'A-'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.