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DUFF & PHELPS RATES BANK OF BOSTON CORPORATION $350 MILLION SUBORDINATED NOTES 'BBB'

 CHICAGO, Nov. 15 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of 'BBB' (Triple-B) to Bank of Boston Corporation's $350 million 6.625 percent subordinated note offering. The noncallable notes were priced to yield 6.67 percent to maturity and are due Dec. 1, 2005.
 The rating reflects the significant improvement in operating fundamentals over the last two years. Asset quality has improved enormously as reflected by the sharp drop in problem loans, earnings have grown, and capital levels have been strengthened. Third quarter 1993 earnings before the effect of merger and restructuring charges equaled $98 million, 1.00 percent return on assets, compared to $55 million (before extraordinary items) and 0.59 percent, in 1992. The improvement in profitability is due to a reduction in credit-related expenses, expansion in net interest margin and improvements in efficiency. The positive asset quality trends continued in the third quarter. Nonaccrual loans and other real estate owned totaled $694 million or 2.5 percent of loans and other real estate owned at Sept. 30, 1993, compared to $728 million, 2.7 percent, and $1.11 billion, 4.3 percent, three months and twelve months earlier, respectively. Charge- off levels also continue to decline. The loan loss reserve equaled 143 percent of nonaccrual loans at Sept. 30, 1993.
 Given the dramatic improvement in asset quality and the favorable problem asset flow data, nonperforming asset trends are no longer the critical issue regarding the credit trend for Bank of Boston. Improvement in the core earnings performance of the organization has now emerged as the principal issue that must be addressed. Progress in this area was demonstrated in the third quarter as core earnings, pretax income before loan loss provisions, OREO expenses, and special items, rose to $184 million from $165 million in the second quarter and $163 million in the year earlier quarter. Recently announced actions to reduce costs combined with strategic expansion of certain lines of business should favorably impact Bank of Boston core earnings capabilities.
 -0- 11/15/93
 /CONTACT: Charles J. Orabutt, Jr., CPA, CFA, of Duff & Phelps Credit Rating Co., 312-368-3153/
 (BKB)


CO: Bank of Boston Corporation ST: Illinois; Massachusetts IN: FIN SU: RTG

TM -- NY149 -- 4730 11/15/93 17:52 EST
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Publication:PR Newswire
Date:Nov 15, 1993
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