In brief: BayBanks Considered For Ratings Upgrade

NEW YORK - Standard & Poor's and Moody's Investors Service both put the ratings of BayBanks on review for possible upgrade and confirmed the ratings of Bank of Boston Corp.

Both rating agencies expected to equalize the lower rated BayBanks debt with that of Bank of Boston upon completion of the merger.

Standard & Poor's, meanwhile, revised its long-term outlook on Bank of Boston to "positive" from "stable," while Moody's reiterated its positive outlook for the Bank of Boston.

The moves by Moody's follow its predilection for reacting positively to news of a bank merger, while the Standard & Poor's actions represent something of a departure from its wait-and-see approach to mergers.

"Bank of Boston's financial performance and asset quality are on par with higher-rated firms," said S&P. Capital levels at the bank are "stronger than in the firm's recent history," said the agency.

S&P said Bank of Boston's ratings will depend on its continued success in diversifying earnings sources while maintaining good assets, particularly in light of its high credit exposure in Latin America.

Meanwhile, IBCA, the European credit rating agency, put the ratings for both Bank of Boston and BayBanks on positive review.

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