MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services affirmed its
ratings on The Toronto-Dominion Bank (TD Bank) and placed Commerce Bancorp Inc's
ratings on positive watch, after TD Bank said it plans to buy Commerce Bancorp
for 8.5 bln usd.
S&P affirmed its 'AA-/A-1+' long- and short-term counterparty credit ratings
on TD Bank and the 'AA-' long-term rating on subsidiary TD Banknorth Inc.
The outlooks on both TD Bank and TD Banknorth remain stable.
The 'BBB+/A-2' long- and short-term counterparty credit ratings on Commerce
Bancorp Inc were placed on positive watch.
The ratings on TD Bank reflect its formidable domestic retail operations,
which continue to be the core growth engine with a substantial base of stable
earnings and a conservative risk culture, S&P said.
The acquisition is fairly sizable for TD Bank as it will add 48 bln usd in
assets to the bank's current asset base and 44.5 bln usd in deposits. The deal
will further improve TD Bank's US market position.
"Although this acquisition is not without challenges, our concerns are
tempered by TD Bank's ability to maintain ample liquidity, moderate credit risk,
consistently strong earnings outpacing those of Canadian peers, and robust risk
management practices," the agency said.
The creditwatch placement on Commerce Bancorp reflects S&P's intention to
raise the ratings to 'AA-/A-1', equalizing them with the ratings on TD Banknorth
when the transaction closes.
The ratings on Commerce Bancorp primarily reflect its strong core
deposit-funded profile counterbalanced by the bank's
larger-than-average securities portfolio, S&P said.
TFN.newsdesk@thomson.com
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