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DUFF & PHELPS REAFFIRMS SOCIETY CORP. AND ADDS KEYCORP TO RATING WATCH--UP IN LIGHT OF PROPOSED MERGER

 CHICAGO, Oct. 5 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has added KeyCorp (NYSE: KEY) and its subsidiary banks to Rating Watch--Up and has reaffirmed the ratings of Society Corporation (NYSE: SCY) and its subsidiaries following the announcement of a definitive merger agreement between the two companies.
 Added to Rating Watch are KeyCorp's notes and debentures which are rated 'A', subordinate notes 'A-', and preferred stock 'BBB+'; Key Bank of New York, N.A.'s long-term certificates of deposit 'A+', and certificates of deposit Duff 1; Key Bank of Washington's long-term certificates of deposit 'A+' and certificates of deposit Duff 1. KeyCorp's commercial paper is reaffirmed at Duff 1. Reaffirmed are Society Corp.'s notes at 'A+', subordinate notes 'A', and commercial paper Duff 1; and Society National Bank's bank notes 'AA-', long-term certificates of deposit 'AA-', subordinate notes 'A+' and certificates of deposit Duff 1+.
 The deal between Society Corp., headquartered in Cleveland with $26 billion in assets, and KeyCorp, of Albany N.Y. with $32 billion in assets, will result in the tenth largest banking company in the U.S. with approximately $58 billion in assets. The companies anticipate consummating the merger by the end of first quarter 1994. The new company, called KeyCorp and headquartered in Cleveland, will operate approximately 1,400 offices in 18 states.
 KeyCorp's addition to Rating Watch is due to the fact that, in comparison to a stand alone entity, the merged company will have better capital ratios and lower double leverage. Importantly, the merger addresses a key uncertainty regarding KeyCorp's management succession plan. Duff & Phelps is comfortable that KeyCorp's demonstrated strength in managing a geographically diverse franchise can be incorporated into the new entity's operating strategy over time. The merger plans include only modest cost savings, suggesting that
non-fee generating support functions will not be sacrificed. A continuing uncertainty is the early indication from management of an aggressive acquisition and geographic expansion program.
 Society's operating fundamentals remain strong, despite the effects of the anticipated merger. Duff & Phelps anticipate that asset quality and reserve coverage measures will remain well above peer averages and capital ratios will decline only slightly. The earning power of the combined entity will be strong with a basic ROA of 2.45-2.55 percent and the double leverage of the combined entity will be moderate by industry standards. A longer term concern will be management's ability to maintain the strong credit and corporate cultures as the company expands.
 -0- 10/5/93
 /CONTACT: Daryl R. Leehaug, CPA, CFA of Duff & Phelps Credit Rating Co., 312-368-3124/
 (KEY SCY)


CO: KeyCorp; Society Corporation ST: Illinois IN: FIN SU: RTG

TM -- NY077 -- 9072 10/05/93 17:13 EDT
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Publication:PR Newswire
Date:Oct 5, 1993
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