Bank Of America To Acquire Merrill

Merrill Lynch notes in its latest quarterly report that its global wealth management unit continues to sell insurance products, retirement services, and trust and generational planning services to small businesses, midsize businesses, employee benefit plans and wealthy individuals.

The Chicago office of Fitch Ratings, which has assigned an A plus long-term issuer default rating to Merrill Lynch, says it is changed the “Rating Watch” status of the rating to Evolving, from Negative.

Fitch also has affirmed the A plus long-term issuer default rating it has assigned to Bank of America.

“The acquisition of Merrill Lynch allays funding and capital raising concerns in this unsettled environment,” Fitch says in an explanation of the change in the way it is looking at Merrill Lynch.

Depending on how the Bank of America combination works, Merrill Lynch and its affiliates could get a 1-notch rating upgrade, Fitch says.

“Fitch is affirming the present ratings of Bank of America and its affiliates,” the firm says. “The acquisition of Merrill’s global franchise in all stock transaction is positive while asset valuations and business conditions remain uncertain for the near future.

There is some element of risk involved in the deal, given given current market conditions, but “this risk is minimal compared to the benefits of enhanced market confidence and market access that this transaction provides to Merrill,” Fitch says.

Bank of America’s managers are experienced in conducting complex acquisitions and have shown that they continue to have good access to the capital markets in the current distressed environment, Fitch says.

“Additional actions taken recently by regulators, such as relaxation on restrictions between intracompany transactions and expanded liquidity facilities should provide both entities with flexibility to navigate the current market turmoil,” Fitch says.

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