Hoping to help international investors and borrowers to differentiate between bank holding companies and their parts, Moody's Investors Service Inc. has established a system to rate the individual banks.

The A-to-E scale is derived from Moody's debt and deposit ratings. The objective is to evaluate the safety and soundness of individual institutions.

"The easiest way to look at this is that the new rating reflects the likelihood that a bank will need some type of support, rather than the likelihood that it will have some support made available to it," said Michael Foley, a vice president in the financial institutions group at Moody's.

Only three banks received the A rating: Morgan Guaranty Trust of New York, Trust Company Bank, a Atlanta subsidiary of SunTrust Banks Inc., and Wachovia Bank of North Carolina.

Credit card specialists dominated the D+ category, the lowest rating currently assigned. "They have very concentrated franchises," said Mr. Foley. A lack of diversification increases potential risk in a declining market.

When applied to foreign banks, the ratings will reflect that foreign nations provide greater support to their banks than the United States does.

"The difference in terms of a correlation between deposit and financial strength ratings is likely to be more substantial for the international ratings," said Mr. Foley.

Sovereign support of banks in foreign countries often significantly boosts the debt and deposit ratings.

Bond investors are not the only ones who could benefit from more transparent bank ratings.

"A large oil company that has operations in Brazil might need a local bank, and would like to operate with the best bank possible," said Mr. Foley. "The financial strength ratings allow you to get the best bank in a challenging operating environment."

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