First USA Bank: Moody's Investors Service Inc. assigned to First USA Bank ratings of Baa2 for long-term deposits, Prime-3 for short-term deposits, and Ba1 for its recent issue of 7.65% subordinated notes due 2003.
The ratings recognize the bank's significant position within the credit card sector and the good credit performance of the bank's credit card portfolio. The ratings also reflect the company's relatively modest capital base, its reliance on purchased funds and credit card securitizations for funding, high double, leverage an balance sheet intangibles at the bank's holding company.
Other factors considered include the expectation that the company's main businesses will he pressured by competition, and that its high profit margins could be subject to erosion.
