MOODY'S PLACES RATINGS OF CHASE MANHATTAN (SENIOR AT Aa3) AND J.P. MORGAN (SENIOR AT A1) ON REVIEW FOR POSSIBLE UPGRADE AFTER MERGER ANNOUNCEMENT
New York, September 13, 2000 -- Moody's Investors Service placed all ratings of Chase Manhattan Corporation
(Chase) (senior at Aa3) and J.P. Morgan & Co.,
Inc. (Morgan)(senior at A1) on review for possible upgrade following
the companies' announcement that Chase and Morgan will merge in an all-stock
transaction.
The combination will create a powerful financial services organization
with global reach and a comprehensive range of products. Chase
and Morgan have complementary strengths and client bases, Moody's
said. The combination of Morgan's expertise in mergers and acquisitions
and equity underwriting with Chase's positions in syndicated lending,
private equity and speculative bonds should create a formidable competitor
in most financial arenas. Both firms have large and profitable
derivatives businesses, which focus on customer-flow transactions
and cover many asset classes.
Morgan has a major presence in Europe, Moody's said, which
should provide the new company with an excellent platform for expanding
its business in those rapidly growing markets. Morgan and Chase,
through its acquisition of the Flemings firm, both have substantial
presences in Asia.
In addition to its other major businesses, the new company will
also be one of the largest asset managers in the world, Moody's
said. This business should contribute a substantial stream of relatively
stable earnings to the combined company.
The new company will have tremendous earnings power, even before
taking into account any synergies, and it will also have a very
large capital base. Both companies have very good asset quality,
according to the rating agency.
The review will focus primarily on the integration issues involved with
blending two large and complex financial institutions, Moody's added,
as well as the ultimate corporate structure of the new entity.
The following Chase ratings have been placed on review for possible upgrade:
The Chase Manhattan Corporation -- the senior debt rating
at Aa3; the subordinated debt rating at A1; the preferred stock
rating at "aa3"; the rating on the preferred shelf at (P)"aa3";
and the issuer rating at Aa3.
The Chase Manhattan Bank -- the ratings of the bank for
long-term deposits and other senior obligations at Aa2; the
rating of the bank for subordinated obligations at Aa3; the issuer
rating at Aa2; and the bank financial strength rating at B+.
Chase Preferred Capital Corp -- the preferred stock rating
at "aa3".
Chase Trust Bank -- the long-term deposit rating
at Aa3; the issuer rating at Aa3; and the bank financial strength
rating at C+.
Chase Manhattan Bank, Paris Branch -- the long-term
deposit rating of the branch at Aa2.
Chase Manhattan Bank, Sydney Branch -- the long-term
deposit rating of the branch at Aa2.
Chase Manhattan Bank, S.A. -- the rating
of the bank for long-term deposits at Aa3 and the bank financial
strength rating at C.
Chase Manhattan Bank (USA) -- the ratings of the bank for
long-term deposits and other senior obligations at Aa2; the
rating of the bank for subordinated obligations at Aa3; the issuer
rating at Aa2; and the bank financial strength rating at C+.
Chase Capital I -- the rating on preferred stock at "aa3".
Chase Capital II -- the rating on preferred stock at "aa3".
Chase Capital III -- the rating on preferred stock at "aa3".
Chase Capital IV -- the rating on preferred stock at "aa3".
Chase Capital V -- the rating on preferred stock at "aa3".
Chase Capital VI -- the rating on the preferred shelf at
(P)"aa3".
Chase Capital VII -- the rating on preferred stock at "aa3".
Chase Capital VIII -- the rating on preferred stock at "aa3".
Chase Capital IX -- the rating on the preferred shelf at
(P)"aa3".
Chase Bank of Texas, N.A. -- the rating
of the bank for long-term deposits and other senior obligations
at Aa2; the issuer rating at Aa2; and the bank financial strength
rating at C+.
The following Chase ratings were confirmed:
The Chase Manhattan Corporation -- the Prime-1 rating
for commercial paper.
The Chase Manhattan Bank -- the Prime-1 rating of
the bank for short-term obligations.
Chase Manhattan Bank (USA) -- the Prime-1 rating
of the bank for short-term obligations.
The Chase Manhattan Bank, Paris Branch -- the Prime-1
rating for short-term deposits.
Chase Manhattan Bank, S.A. -- the Prime-1
rating for short-term deposits.
Chase Trust Bank -- the Prime-1 rating for short-term
deposits.
Chase Manhattan Bank of Canada -- the Prime-1 rating
of the bank for commercial paper.
Chase Bank of Texas, N.A. -- the Prime-1
rating for short-term obligations.
The following J.P. Morgan ratings have been placed on review
for possible upgrade:
J.P. Morgan & Co. Incorporated --
senior debt A1; subordinated debt A2 ; preferred stock "a1";
issuer rating A1.
Morgan Guaranty Trust Company of New York -- bank deposit
rating Aa3; other senior obligations rating Aa3 ; senior debt
Aa3; subordinated debt A1; issuer rating Aa3;and the bank
financial strength rating B.
Morgan Guaranty Trust Company of New York, Paris Branch --
bank deposit rating Aa3.
J.P. Morgan Australia Ltd. -- senior
debt Aa3.
J.P. Morgan Index Funding Company, LLC --
preferred stock "aa3" .
JPM Capital Trust I -- preferred stock "a1"
JPM Capital Trust II- - preferred stock "a1"
JPM Capital Trust III -- preferred stock shelf (P) "a1".
JPM Capital Trust IV -- preferred stock shelf (P) "a1"
The following J.P. Morgan ratings were confirmed:
J.P. Morgan & Co. Incorporated --
Prime-1 for its commercial paper.
Morgan Guaranty Trust Company of New York -- Prime-1
for its bank deposit rating; Prime-1 for other senior obligations;
Prime-1 for its commercial paper.
Morgan Guaranty Trust Company of New York, Paris Branch --
Prime-1 for its bank deposit rating.
J.P. Morgan Australia Ltd. -- Prime-1
for its commercial paper.
Chase Manhattan Corporation, a bank holding company headquartered
in New York, New York, had managed assets of $416 billion
and stockholders' equity of $25 billion as of June 30, 2000.
J.P. Morgan & Co. Incorporated, a bank
holding company headquartered in New York, New York, had assets
of $266 billion and stockholders' equity of $12 billion
as of June 30, 2000.
New York
Ryan O'Connell
Senior Vice President
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: (212) 553-0376
SUBSCRIBERS: (212) 553-1653
New York
Peter E. Nerby
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service
JOURNALISTS: (212) 553-0376
SUBSCRIBERS: (212) 553-1653
