MOODY'S CONFIRMS BANK OF MONTREAL'S RATINGS (SENIOR AT Aa3)
New York, 02-20-96 -- Moody's Investors Service confirmed the ratings of Bank of Montreal (senior at Aa3) and subsidiaries. The confirmation follows the announcement of a definitive agreement between Bank of Montreal (BMO) and Grupo Financiero Bancomer (GFB), in which BMO will invest approximately C$640 million into GFB. The investment will primarily be financed by BMO's discount Brady Bonds. The investment will give BMO a 16% equity interest in GFB. Moody's said that the confirmation was based on the view that BMO has the financial flexibility to make such an investment even though the investment increases the risk profile of its Mexican exposure. GFB's major subsidiary is Bancomer. Bancomer and other Mexican banks are currently burdened by serious asset quality problems in the aftermath of the December 1994 peso crisis. Bancomer is rated D+ for bank financial strength, on review for possible downgrade.
Ratings confirmed are the following:
Bank of Montreal -- Aa3 for senior debt; A1 for subordinated debt; Aa3 rating on the bank for long-term deposits; Prime-1 rating of the bank for commercial paper and short-term deposits; bank financial strength rating of B.
Harris Bankcorp Inc -- (P)A1 for a shelf registration senior debt program; A2 for subordinated debt; Prime-1 rating of the company for commercial paper.
Harris Trust and Savings Bank -- Aa2 for senior long-term debt, Aa2 rating on the bank for long-term deposits, other senior obligations, and counterparty obligations; Prime-1 rating on the bank for short-term deposits and other senior obligations; and bank financial strength rating of C+.
Bank of Montreal is headquartered in Toronto, Canada. Its assets were C$152 billion (US$106 billion) on October 31, 1995.
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