S&P: Hibernia still on watch

Standard & Poor's said its ratings on Hibernia Corp. (BBB+/Watch negative), including the BBB subordinated debt rating, will remain on CreditWatch negative, where they were placed March 7.

Hibernia's and Capital One Financial Corp.'s (BBB-/positive) and announcement that they have renegotiated the acquisition price that Capital One will pay for Hibernia will have no ratings impact on either entity.

The renegotiated price of $5 billion, or a 9% reduction from the previous price, reflects the outcome of due diligence efforts performed to date, S&P noted.

Following most natural disasters, after some initial weakening in results, bank entities typically benefit from rebuilding efforts, the agency said, adding nevertheless, the scale of Hurricane Katrina's devastation appears to have the potential to be considered in historic terms and there are many uncertainties as to the impact a prolonged shutdown/slowdown of the Gulf State region's economy could have on Hibernia's operations.

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