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DUFF & PHELPS: CORESTATES CAPITAL CORP $200 MILLION SUBORDINATED NOTES RATED 'A'

 CHICAGO, Oct. 12 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `A' (Single-A) to CoreStates Capital's $200 million offering of 5-7/8 percent subordinated notes. The non-callable notes were priced to yield 5.902 percent to maturity and are due Oct. 15, 2003. Debt issued by CoreStates Capital Corp is unconditionally guaranteed as to payment of principal and interest by CoreStates Financial Corp.
 The rating reflects CoreStates' strong underlying fundamentals including large capital ratios, solid loan quality and reserve levels, and above average profitability. The strong fundamentals are reflected in CoreStates second quarter performance. Net income equaled $83 million, 1.46 percent return on assets, up 25 percent from $66 million, 1.21 percent, in 1992. CoreStates strong earnings performance is broadbased with each line of business (wholesale banking, consumer financial services, trust and investment management, and its EPS, Inc., affiliate) producing very solid levels of profitability. Positively, CoreStates' focus on fee-based businesses provides an element of diversification from lending-based revenues.
 CoreStates has built a very strong balance sheet with large capital ratios, improved asset quality and enhanced loan loss reserves. Stockholders' equity equaled 7.70 percent of assets at June 30, 1993, with a tangible common equity ratio of 7.52 percent. Asset quality weakened with the March 1990 acquisition of First Pennsylvania Corporation, but has improved substantially over the last twenty-four months. Nonperforming assets equaled 1.90 percent at midyear 1993 compared to 2.49 percent and 3.07 percent at yearend 1992 and yearend 1991, respectively. Charge-off activity has also improved nicely during this period. The loan loss reserve represented 2.11 percent of loans and 140 percent of nonperforming loans at June 30, 1993.
 The rating also recognizes Duff & Phelps view that consolidation within the industry will accelerate and CoreStates will likely be an active, yet conservative, acquiror. In August 1993 CoreStates agreed to acquire Constellation Bancorp, a $2.3 billion bank holding company headquartered in Elizabeth, N.J.
 Philadelphia-based CoreStates Financial Corp reported total assets of $23.5 billion at June 30, 1993.
 -0- 10/12/93
 /CONTACT: Charles J. Orabutt, CPA, CFA, of Duff & Phelps Credit Rating Co., 312-368-3153/


CO: CoreStates Financial Corp ST: Pennsylvania IN: FIN SU: RTG

MP -- NY085 -- 1234 10/12/93 15:37 EDT
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Publication:PR Newswire
Date:Oct 12, 1993
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