SAN FRANCISCO (Thomson Financial) - Standard & Poors Ratings Services Monday
upgraded Bear Stearns Companies Inc.'s debt and counterparty credit ratings to
"AA-/A-1+" and removed the company from creditwatch developing.
The outlook for the New York-based financial services company is stable.
"The rating action recognizes the strengthened immediate guarantee by
JPMorgan Chase & Co. of all of Bear Stearns' counterparty obligations," S&P
said.
JPMorgan earlier said it was raising its offer for Bear Stearns' stock to
around $10 per share from an earlier offer of $2.
The Federal Reserve Bank of New York's $30 billion special financing
associated with the transaction has also been amended so that JPMorgan will bear
the first $1 billion of any losses associated with the Bear Stearns assets being
financed and the Fed will fund the remaining $29 billion on a non-recourse basis
to JPMorgan, the two companies said.
The price increase and the anticipated increase in the amount of shares
controlled by JPMorgan raise the probability that the deal will go ahead, most
likely by mid-May, S&P said.
JPMorgan's "AA-/Stable/A-1+" credit ratings are not affected by the deal and
its overall capital strength is unchanged, S&P said.
Bear Stearns share price more than doubled Monday, trading at $12.68 on
volume close to three times the 30-day daily average.
JPMorgan shares were trading up $1.02 at %46.99.
Brigid Gaffikin
bg/vj
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