Moody's: Fortis unaffected

Moody's Investors Service said that, given the stage of the discussions and the contemplated transaction's uncertainty, it will not take any action on the ratings of Fortis Group, the Royal Bank of Scotland Group and Banco Santander following the announcement that they have approached ABN Amro Bank NV with their proposals regarding a potential 70% cash and 30% share (Bank of Scotland shares) transaction with the bank. The banks are understood to be planning a meeting to discuss these proposals.

The agency said that the potential increase in the leverage of the acquiring banks that could result from the sizeable cash portion of the proposed transaction and the negative impact this could have on the acquiring banks' financial strength ratings will depend upon the final structure and funding of any transaction.

Key features of these proposals include an indicative offer of €72 billion based on a price of €39 per share for ABN Amro, subject to due diligence and including the bank's final 2006 dividends; LaSalle Bank would remain part of the ABN Amro group; and the banks will be allowed due diligence information on LaSalle similar to that shared with Barclays and Bank of America so that they could then potentially move forward to an offer.

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