In a departure from the norm after merger announcements, several rating agencies placed the debt of NBD Bancorp on negative watch and that of First Chicago Corp. on positive watch.

In previous mergers, the ratings of the higher-rated company - most often the acquirer - have been affirmed. But in this case, Standard & Poor's Ratings Group, Moody's Investors Service, Duff & Phelps, and Fitch Investors Service, placed NBD's debt on credit watch with negative implications. "What the rating agencies are signaling is that when a merger of equals of two companies of large size takes place, they are cautious about the ability to realize the opportunities," said Allerton G. Smith, a fixed-income analyst at Donaldson, Lufkin & Jenrette Securities Corp.

In their actions, the rating agencies have generally cited the challenge of integrating different corporate cultures in a merger of equals.

The bond market responded to the rating action, demanding a higher premium for NBD bonds, while paying a higher premium for bonds at First Chicago.

Analysts, however, were divided over whether a downgrade for NBD would be justified.

"I disagree with the rating agencies," said Mr. Smith. "Averaging the ratings in this case is far too simplistic."

Mr. Smith believed the combined company would be strong, while the social issues will "always exist in a merger of equals."

J.P. Morgan & Co. bond analyst John Works said he thinks the rating action is deserved. "NBD is merging with an entity that has a considerably weaker credit history," he said.

Although First Chicago's current balance sheet looks fairly clean, Mr. Works said that might be more of a reflection of the current market, and less of a sign of a cultural change.

"Ratings should incorporate history," said Mr. Works, and in this instance, the challenge for NBD will be to preserve its credit quality in a marriage to First Chicago.

Mr. Smith, however, said that First Chicago was the first major bank to put its problem real estate portfolio into the accelerated disposition process.

Other analysts and the rating agencies are awaiting proof of First Chicago's improved credit culture, however.

"Over the longer term, there is a reasonable prospect for the combined entity to regain its superior rating," said Mr. Works.

Analysts said that NBD was no doubt aware of the potential downgrade risk, but was willing to accept that given the strategic priority of the deal.

Even though credit quality issues were important enough to kill deals in the past, it has become something of a nonissue in the current consolidation market.

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