Fitch Will Monitor Impact of Nuevo Banco Comercial Sale.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 -- It was recently announced that a consortium led by Advent International Fund (Advent) had reached an agreement with the Uruguayan government to purchase control of Nuevo Banco Comercial (NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. ), which is pending regulatory approval. The consortium is composed of Advent (56%), Morgan Stanley Strategic Investments (24%), DEG -- a German development company -- (10%), and the Netherlands Development Finance Company -- FMO FMO For Members Only FMO Flavin-Containing Monooxygenase FMO Financierings-Maatschappij voor Ontwikkelingslanden (Dutch: Netherlands Development Finance Company) FMO Fire Management Officer (National Park Service) -- (10%). Under the agreement, the consortium committed to purchase 100% of NBC's voting shares Voting Shares Shares that give the stockholder the right to vote on matters of corporate policy making as well as who will compose the members of the board of directors. Notes: Different classes of shares, such as preferred stock, sometimes don't allow for voting rights. (59% of total shares) for US$98.5 million, close to book value. The consortium will also have the option to purchase the remaining equity, which is in the form of preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. , for US$69.8 million from the government during the next five years. In addition, the government has a put option to sell its entire interest during the same period. Grupo Servicios and Transacciones (GST GST abbr. Greenwich sidereal time GST (in Australia, New Zealand, and Canada) Goods and Services Tax ) will be responsible for management of the bank. GST is an Argentine group whose members boast a long history in the local market and currently owns a corporate bank (Banco de Servicios y Transacciones) in Argentina. Advent is an investment fund that manages assets of over US$10 billion and operates through offices in 13 countries in Europe, North America, Latin America, and Asia. Among its current investments in Latin America are a postal company, OCA OCA oculocutaneous albinism. , and a pharmaceutical company, FadaPharma. Fitch will evaluate the impact on NBC's ratings once the sale has been finalized and the new shareholders define their strategy and the potential impact on the bank's risk profile becomes clearer. The bank's current ratings are as follows: long-term foreign currency (rated 'B+' by Fitch), long-term national rating (rated 'AA-' by Fitch), and support (rated '4' by Fitch). These ratings are based on the solid position of the bank's franchise in the local market, good capital levels, and good liquidity but also take into account the lack of a strong commercial strategy that would enable the bank to further consolidate its market position going forward, as well as the weak operating conditions in Uruguay. NBC was created with the assets of three entities that were liquidated following the Uruguayan banking crisis in 2002. The bank, which reported total assets of US$926 million at the end of June 2005, ranks as the second largest private bank in terms of deposits with a 15% market share. The bank offers universal banking services and has a strong national presence with 48 branches and also has a subsidiary in Brazil, Banco Comercial Uruguai. 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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