Moody's confirms Bank of Montreal

Moody's Investors Service said it confirmed Bank of Montreal's Aa2 ratings on deposits and B- bank financial strength rating, which maps to A1 on the long-term scale, following the completion of the acquisition of Marshall & Ilsley Corp. by its U.S. subsidiary Harris Financial Corp.

Moody's downgraded the bank financial strength rating of Harris NA to C from C+, which maps to A3 on the long-term scale. The assumptions about the very high likelihood of parental support for Harris are unchanged, and as a result Harris long-term deposit rating of A1 was confirmed.

All short-term Prime-1 ratings of Bank of Montreal and Harris were affirmed and the outlook on all long-term ratings is stable.

Bank of Montreal's unsupported ratings were confirmed despite the downgrade of Harris. The affirmation of Bank of Montreal's ratings results from its sound capital position giving it the flexibility to take on increased risk in its U.S. operations.

If successfully executed, the acquisition of will enhance the bank's platform in the U.S. Midwest, the agency noted. The rating actions follow the completion of the acquisition on July 5 and conclude the rating reviews that began when the transaction was announced on Dec. 17, 2010, the agency added.

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