Fitch Upgrades ASRV, Rating Outlook Remains Positive.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has upgraded the long-term rating of AmeriServ Financial, Inc. (ASRV ASRV Australian Submarine Rescue Vehicle ASRV Autonomous Survival and Recovery Vehicle (Star Trek) ASRV Amrumer Segel- und Regatta-Verein ) to 'B+' from 'B'. At the same time, Fitch has affirmed the ratings of AmeriServ Financial Bank (ASRVB) and AmeriServ Capital Trust I (ASRVP). The Rating Outlook remains Positive. A complete list of ratings is provided below. The rating action follows ASRV's completion of a $10.3 million private placement of common stock. Fitch notes that ASRV previously raised an additional $25.8 million through two private placements of common shares in fourth quarter 2004. The upgrade of ASRV's long-term rating is reflective of improving financial flexibility, as the proceeds of the equity offering will be used to further reduce the parent company's debt burden. Additionally, ASRV's demonstrated access to the capital markets to raise equity in support of its balance sheet restructuring is viewed positively. The net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of the equity offering will be used as follows: $1 million downstreamed to ASRVB to support the prepayment of approximately $100 million of Federal Home Loan Bank advances (6% interest rate and 2010 maturity) and related interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. , $1 million capital infusion Capital infusion Often refers to the cross-subsidization of divisions within a firm. When one division is not doing well, it might benefit from an infusion of new funds from the more successful divisions. into AmeriServ Trust and Financial Services Company to support growth, and $7.2 million to redeem outstanding trust preferred securities to $12 million. While these actions will result in a one-time after-tax charge of approximately $10 million-$11 million in third quarter 2005 and a loss for the full year 2005, Fitch believes that these initiatives help make the company's debt service less onerous and better position ASRV for future improvements in its financial and risk profile. Enhanced core earnings and improved profitability measures will determine progress on the ratings front. The following rating is upgraded with a Positive Outlook by Fitch: AmeriServ Financial, Inc. -- Long-term rating upgraded to 'B+' from 'B'. The following ratings are affirmed and maintained on Rating Outlook Positive by Fitch: AmeriServ Financial, Inc. -- Short-term 'B'; -- Individual 'D'; -- Support '5'. AmeriServ Financial Bank -- Long-term 'BB-'; -- Long-term deposits 'BB-'; -- Short-term 'B'; -- Short-term deposits 'B'; -- Individual 'D'; -- Support '5'. AmeriServ Capital Trust I -- Trust preferred 'B-'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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