Bank of Boston Corp. is likely to report a $130 million hedging loss for the first quarter, according to a report by SNL Securities. But a report from Keefe, Bruyette & Woods Inc., responding to SNL's, played down the potential loss.

Bank of Boston has agreed to a joint venture with two private investors and Barnett Mortgage Co. The agreement has Bank of Boston spinning off its mortgage unit and combining it with Barnett's servicing operation.

Bank of Boston put a hedge on its servicing assets to guard against any loss resulting from a change in interest rates. The outcome was a gain on its servicing assets as rates rose, and a loss on the hedge.

"Since it is a hedging loss, it has no real economic effect on the franchise," the SNL report said, "but it could create a nasty accounting event in the first quarter."

Conversely, the Keefe report said, "No net economic or GAAP (generally accepted accounting principles) loss will be incurred from this transaction."

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