MOODY'S CONFIRMS MERRILL LYNCH & CO. INC.'S CREDIT RATINGS (A1 SENIOR) AND FINANCIAL STRENGTH RATINGS OF ITS INSURANCE SUBSIDIARIES
New York, 07-25-95 -- Moody's Investors Service confirmed the A1 ratings on the senior debt of Merrill Lynch & Co., Inc. following the announcement that Merrill Lynch expects to acquire Smith New Court PLC for œ526 million (US$852 million). The rating agency also confirmed the Prime-1 ratings of Merrill Lynch and its guaranteed subsidiaries for commercial paper, as well as the A1 insurance financial strength ratings of Merrill Lynch Life Insurance Company and ML Life Insurance Company of New York.
Moody's expects that the acquisition of Smith New Court will enhance Merrill Lynch's global equities businesses, particularly in Europe, where Smith New Court is the leading market-maker of U.K. equities and the second-largest market-maker of non-U.S. equities. Smith New Court also has significant equities businesses in Asia and Latin America.
The acquisition is expected to strengthen Merrill Lynch's global distribution capabilities, which include access to both cross-border and selected major domestic-market investors in Europe and Asia. Moody's noted that Merrill Lynch has sufficient financial resources to support the all-cash offer, in addition to the approximately $500 million in goodwill that will be added to the balance sheet. The value of the combination will hinge on a smooth integration of businesses and, in particular, on the retention of key professionals and clients, Moody's pointed out.
The following ratings are confirmed:
Merrill Lynch & Co., Inc. -- A1 rating of the senior debt; A1 counterparty rating of the company; A2 rating of the subordinated debt; 'a1' rating of the preferred stock; (P)A1 rating of the senior shelf registration; (P)A2 rating of the subordinated shelf registration; and the Prime-1 rating of the company for commercial paper.
Merrill Lynch Life Insurance Company -- A1 insurance financial strength rating.
ML Life Insurance Company of New York -- A1 insurance financial strength rating.
Merrill Lynch & Co. (Canada) Ltd. -- Prime-1 rating of the company for commercial paper (guaranteed by Merrill Lynch & Co., Inc.).
Merrill Lynch International (Australia) Ltd. -- Prime-1 rating of the company for commercial paper (guaranteed by Merrill Lynch & Co., Inc.).
Merrill Lynch & Co., Inc. is a holding company that, through its subsidiaries, provides investment, financing, insurance, and related services to retail and institutional clients worldwide. The company is headquartered in New York City, and it had total assets of $177 billion as of March 31, 1994. Smith New Court PLC is a leading U.K.-based international securities firm.
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