Moody's lifts CoreStates securities

Moody's Investors Service said it upgraded to Baa1 from Baa2 the cumulative junior subordinated securities issued by CoreStates Capital I, CoreStates Capital II and CoreStates Capital III, which are part of the Wells Fargo & Co. group. All other Wells Fargo ratings are not affected.

The agency said the upgrades reflect that these obligations are guaranteed by a Wells Fargo bank subsidiary as opposed to the holding company. Moody's had rated these securities identical to the holding company's junior subordinated obligations because they were a more prominent component of the issuing entity's total capital structure. As a result, the agency believed that the likelihood of dividend deferral was very similar to that of cumulative junior subordinated obligations of the issuing entity's holding company.

With Wells Fargo's larger consolidated capital base, Moody's now believes it is more appropriate that the ratings on these obligations reflect their position within the bank's capital structure and their resultant seniority over junior subordinated instruments of the holding company.

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