NEW YORK First Union Corp.'s debt and preferred stock was upgraded on Tuesday by Standard & Poor's.

S&P boosted the bank's senior debt to A from A-minus and raised the subordinated debt to A-minus from BBB-plus. Preferred stock, previously rated BBB, is now rated BBB-plus.

The ratings actions reflect the bank's improvement in profitability, liquidity, and operational diversity provided by recent acquisitions, said S&P.

But those acquisitions, particularly the deals for Dominion Bancshares and First American Metro Corp., have brought substantial burdens of problem real estate, said S&P.

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