Duff & Phelps Co. recently assigned a rating of BBB-plus to Citicorp's $131.25 million noncumulative preferred stock issue. The shares are noncallable for five years and were priced to yield 8.5%.

The agency upgraded Citicorp twice in 1994 because of a strengthening balance sheet, better capital ratios, and higher loan-loss reserves. The agency's concern about problem assets above peer levels is tempered by an improved risk management system that utilizes portfolio monitoring and responds more quickly to emerging asset quality problems.

Duff & Phelps also assigned an initial rating of AA-plus to Norwest Corp.'s $200 million issue of senior notes. This issue, which matures Nov. 15, 1997, was priced at 99.921 to yield 7.725%.

The rating reflects Norwest's ability to deliver financial performance that is consistently better than industry norms, reports Duff & Phelps. Interest rate risk remains in check, and the outlook for the corporation's net interest margin is positive. Norwest's diversified source of revenues underlies the strong consolidated performance, said Duff & Phelps.

Profits rose 2.2% at Norwest Mortgage in the most recent quarter, up from the prior quarter's 1.5%, which Duff & Phelps says reflects the increased sales of mortgage servicing rights.

The announced acquisition of Director's Mortgage Loan Corp. strengthens Norwest's presence in western states. Duff & Phelps plans to assess the acquisition price in light of the interest rate pressure on origination volume.


Fitch Investors Service Inc. recently raised Wells Fargo & Co.'s senior debt rating to A from A-minus. The company's subordinated debt rating improved to A-minus from BBB-plus, and the preferred stock rating improved to BBB-plus from BBB. The credit trend remains improving at Fitch.

The agency cited the bank's improved asset quality and enhanced profitability. The latter is benefiting from firm control of overhead costs, while the former reduces the need to make provisions for possible loan losses, said Fitch.

In addition to Wells Fargo's capital ratio, Fitch notes the company's additional 150 basis points of residual equity in its reserve for loan losses.

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Duff & Phelps rated a new senior debt issue from Associates Corp. of North America an AA-minus. The agency rated the finance company's $300 million 7.75% senior notes, which were priced at 99.746 to yield 7.812%. The notes are due on Feb. 15, 2005.

Associates' ratings reflect its strong profitability measures, established consumer and commercial finance franchises, and high-quality, well-diversified receivables portfolio, reported Duff & Phelps. The rating agency expects a strong interest rate matching discipline to mitigate earnings volatility.

Associates' greatest risks are pricing pressure for consumer and commercial portfolio, an ability to maintain credit quality and manage growth, and the potential for federal regulatory loan pricing caps.

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