Moody's may up Riggs

Moody's Investors Service said it changed the direction of it review on the ratings of Riggs National Corp. (subordinated at B2) and its lead bank subsidiary, Riggs Bank NA (deposits at Ba1) to review for upgrade from review, direction uncertain.

Moody's said the change reflected the increased likelihood that The PNC Financial Services Group, Inc. will acquire Riggs National in accordance with the amended July 2004 agreement.

Under the revised agreement, Riggs National will be merged into The PNC Financial Services Group, Inc., while PNC Bank NA would acquire the assets of Riggs Bank NA.

Moody's said it believes that despite Riggs continuing to be the subject of lawsuits and on-going investigations by U.S. and foreign governmental agencies and authorities, the likelihood of the revised acquisition agreement unraveling has diminished.

Moody's observed that Riggs' asset quality remains strong, its liquidity profile is sound and its capital adequacy remains healthy despite the impact of the legal and compliance expenses, fines and litigation reserves that have weighed on its profitability.

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