Standard & Poor's Corp. put Cincinnati-based Star Banc Corp. on the CreditWatch list Wednesday with negative implications based on a recent acquisition plan.
S&P's rating for Star Banc is A-minus, and senior unsecured debt of Star Bank, its principal subsidiary, was rated A/A-1, and the subsidiary's subordinated debt was rated A-minus. At the same time, the ratings agency affirmed Star Banc Corp.'s A-2 commercial paper rating and short-term counterparty credit ratings.
The rating changes follow Star Banc's recently announced plan to buy 53 Ohio branches, with $1.3 billion of deposits and $191 million in loans, from Banc One Corp., S&P said in a press release.
Star Banc has also agreed to buy Great Financial Corp., a Louisville, Ky., thrift company.
"Goodwill and other intangible assets arising from these acquisitions have caused a deterioration of Star Banc's tangible common equity ratio from 6.8% prior to the transactions, to an estimated 5% post-completion," said S&P ratings analyst Martin S. Kounitz.
- Staff and wire reports