Fitch Upgrades Bank of America; Outlook Stable.CHICAGO -- 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 ratings of Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. Corporation (BAC BAC abbr. blood alcohol concentration ) and its affiliates to 'AA' from 'AA-'. The Rating Outlook is Stable. Fitch has affirmed BAC's short-term and individual ratings. At the same time, Fitch has assigned new ratings to four Bank of America affiliates. A complete list of ratings follows at the end of this release. Fitch's upgrade reflects BAC's extensive global franchise, strong performance, good credit risk profile, strong liquidity and satisfactory capital position. The upgrade also reflects BAC's progress in key areas discussed when Fitch assigned the Positive Outlook in October 2006. BAC has virtually completed the integration of the MBNA MBNA Monument Builders of North America MBNA Mercedes-Benz North America MBNA Maryland Bank, National Association MBNA Maryland Bank North America MBNA Mount Baker Nurses Association (Bellingham, Washington) merger and has experienced gains in both credit card revenues and profits since the date of the merger. Also, BAC's investment in its trading and investment banking platforms is showing progress, with trading profits Trading profit The profit earned on short-term trades of securities held for less than one year, subject to tax at normal income tax rates. trading profit in particular significantly higher with modest incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. risk. Earlier, BAC had also taken steps to reduce some of its higher risk activities, such as Latin American retail banking and private equity operations. Credit costs in the commercial loan portfolio remain quite low due to a vigorous U.S. economy. Fitch expects BAC's credit costs to rise from the current low levels as the credit cycle progresses. Fitch also anticipates that BAC's good underwriting and risk management practices will help maintain overall sound asset quality even when economic conditions weaken. BAC still faces several challenges. These include managing headline risk headline risk The possibility a negative news story will spread to other media outlets and cause a significant change in the value of an investment. from ongoing litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and regulatory investigations, executing the continuing build-out in the investment banking platform, and achieving a greater global presence. Also, BAC has been an active acquirer and any future mergers will need to be integrated successfully. These factors currently constrain the individual rating at 'A/B.' Fitch further notes that capitalization, while sufficient for the 'AA' long-term rating level, does not now provide a cushion for further upward ratings progress. Fitch has also assigned new ratings to four bank subsidiaries: Bank of America California, National Association; Bank of America Georgia N.A.; Bank of America Oregon, National Association; and Bank of America Rhode Island Rhode Island, island, United States Rhode Island, island, 15 mi (24 km) long and 5 mi (8 km) wide, S R.I., at the entrance to Narragansett Bay. It is the largest island in the state, with steep cliffs and excellent beaches. , National Association. All four banks are wholly owned by BAC and have strong capital and low-risk balance sheets. Fitch has aligned the ratings of these institutions with those of BAC's other bank subsidiaries, as the risk profile is essentially the same. Finally, Fitch notes that ratings of U.S. Trust Corporation and its affiliates are on Rating Watch Positive pending completion of that company's acquisition by BAC later this year. Fitch expects the ratings of U.S. Trust and affiliates will be aligned with the ratings of BAC and its affiliates, as upgraded today, at consummation. BAC is one of the largest U.S. banks, with a formidable domestic retail footprint spanning 30 states. The recent acquisition of MBNA Corp has made BAC the largest U.S. credit card issuer. It is also among the leading U.S. banks in large corporate lending, middle market commercial lending, mortgages, home equity loans, and asset management. It offers corporate banking, investment banking and treasury services Treasury services is a function of an investment bank which provides transaction, investment and information services for chief financial officers, treasurers. Treasury services concentrates and invests client money, and provides trade finance and logistics solutions as well as on a global basis. Fitch has upgraded the following ratings with a Stable Rating Outlook: Bank of America N.A. --Long-term deposits to 'AA+' from 'AA'; --Long-term issuer default rating to 'AA' from AA-'; --Long-term senior debt to 'AA' from 'AA-'; --Long-term subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". to 'AA-' from 'A+'. FIA FIA feline infectious anemia. Card Services The software support for PC Cards. PC Card applications talk to Card Services. See PC Card. N.A. --Long-term deposits to 'AA+' from 'AA'; --Long-term issuer default rating to 'AA' from 'AA-'; --Long-term senior debt to 'AA' from 'AA-'; --Long-term subordinated debt to 'AA-' from 'A+'. MBNA Europe Bank Ltd. --Long-term issuer default rating to 'AA' from 'AA-"; --Long-term senior debt to 'AA' from 'AA-'; --Subordinated debt to 'AA-' from 'A+'. MBNA Canada Bank --Long-term issuer default rating to 'AA' from 'AA-'; --Long-term senior debt to 'AA' from 'AA-'; --Subordinated debt to 'AA-' from 'A+'. Bank of America Corporation --Long-term issuer default rating to 'AA' from 'AA-'; --Long-term senior debt to 'AA' from 'AA-'; --Long-term subordinated debt to 'AA-' from 'A+'; --Preferred stock to 'AA-' from 'A+'. Banc of America Securities Limited --Long-term issuer default rating to 'AA' from 'AA-'. Banc of America Securities LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control --Long-term issuer default rating to 'AA' from 'AA-'. B of A Issuance B.V. --Long-term issuer default rating to 'AA' from 'AA-'; --Long-term senior debt to 'AA' from 'AA-'; --Long-term subordinated debt to 'AA-' from 'A+'. Bank of America Preferred Funding Corp. --Auction-rate preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. to 'AA-' from 'A+'. BAC Capital Trust I - VIII --Trust preferred securities to 'AA-' from 'A+'. BAC Capital Trust X - XIV --Trust preferred securities to 'AA-' from 'A+'. BankAmerica Capital II, III --Trust preferred securities to 'AA-' from 'A+'. BankAmerica Institutional Capital A, B --Trust preferred securities to 'AA-' from 'A+'. BankBoston Capital Trust I-IV --Trust preferred securities to 'AA-' from 'A+'. Banc of America Dutch Auction Dutch Auction An auction where the price on an item is lowered until it gets its first bid, and then the item is sold at that price. Notes: The U.S. Treasury (and other countries) uses a Dutch auction when it sells securities. Preferred Corporation --Trust preferred securities to 'AA-' from 'A+'. Barnett Capital Trust I, II, III --Trust preferred securities to 'AA-' from 'A+'. Fleet Capital Trust II, V, VIII, IX --Trust preferred securities to 'AA-' from 'A+'. MBNA Capital A, B, D, E --Trust preferred securities to 'AA-' from 'A+'. NB Capital Trust II, III, IV --Trust preferred securities to 'AA-' from 'A+'. Summit Capital Trust I --Trust preferred securities to 'AA-' from 'A+'. BankAmerica Corporation --Long-term senior debt to 'AA' from 'AA-'; --Long-term subordinated debt to 'AA-' from 'A+'; --Preferred stock to 'AA-' from 'A+'. BankBoston Corporation --Subordinated debt to 'AA-' from 'A+'. Fleet National Bank --Subordinated debt to 'AA-' from 'A+'. FleetBoston Financial FleetBoston Financial was a Boston, Massachusetts-based bank created in 1999 by the merger of Fleet Financial Group and BankBoston. In 2004 it merged with Bank of America; all of its banks and branches were given the Bank of America logo. Corp --Senior long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. to 'AA' from 'AA-'; --Subordinated debt to 'AA-' from 'A+'; --Preferred stock to 'AA-' from 'A+'. MBNA Corp. --Long-term senior debt to 'AA' from 'AA-'; --Long-term subordinated debt to 'AA-' from 'A+'. NationsBank Corp --Long-term senior debt to 'AA' from 'AA-'; --Long-term subordinated debt to 'AA-' from 'A+'. NationsBank, N.A. --Long-term senior debt to 'AA' from 'AA-'. NCNB NCNB North Carolina National Bank (became NationsBank) NCNB Non-Comment, Non-Blank (lines of code) NCNB Nobody Cares Nobody Bothers , Inc. --Long-term subordinated debt to 'AA-' from 'A+'. Fitch has affirmed the following ratings: Bank of America N.A. --Short-term issuer 'F1+'; --Short-term senior debt 'F1+'; --Short-term deposits 'F1+'; --Individual 'A/B'; --Support '1'. FIA Card Services N.A. --Short-term issuer 'F1+'; --Short-term deposits 'F1+'; --Individual 'A/B'; --Support '1'. MBNA Europe Bank Ltd. --Short-term issuer 'F1+'; --Individual 'A/B'; --Support '1'. MBNA Canada Bank --Short-term issuer 'F1+'. Bank of America Corporation --Short-term issuer 'F1+'; --Short-term senior debt 'F1+'; --Individual 'A/B'; --Support '5'. Banc of America Securities Limited --Short-term issuer 'F1+'. Banc of America Securities LLC --Short-term issuer 'F1+'. B of A Issuance B.V. --Support '1'. MBNA Corp. --Short-term debt 'F1+'. Fitch assigns the following ratings with a Stable Rating Outlook: Bank of America California, National Association --Long-term issuer default rating 'AA'; --Short-term issuer 'F1+'; --Support '1'; --Individual 'A/B'. Bank of America Georgia, N.A. --Long-term issuer default rating 'AA'; --Short-term issuer 'F1+'; --Support '1'; --Individual 'A/B'. Bank of America Oregon, National Association --Long-term issuer default rating 'AA'; --Short-term issuer 'F1+'; --Support '1'; --Individual 'A/B'. Bank of America Rhode Island, National Association --Long-term issuer default rating 'AA'; --Short-term issuer 'F1+'; --Support '1'; --Individual 'A/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. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion