Fitch puts National City on positive watch, affirms PNC

Fitch Ratings said it placed the ratings of National City Corp. on Rating Watch positive, including its BBB+ long-term issuer default rating and senior debt, BBB subordinated debt, BBB- preferred stock, F2 short-term issuer default rating and C individual rating.

Also placed on watch were National City Bank (Cleveland)'s A- long-term and F2 short-term issuer default ratings and C individual rating; the A- senior debt and BBB+ subordinated debt of National City Bank (Cleveland), National City Bank of Indiana and National City Bank of Kentucky; the BBB+ subordinated debt of National City Bank of Pennsylvania and National City Bank (Columbus); the F2 short-term issuer default rating and commercial paper of National City Credit Corp.; and the BBB preferred stock of National City Capital Trust II-IV, National City Preferred Capital Trust I, Fort Wayne Capital Trust I and PFGI Capital Corp.

The ratings of PNC Financial Services Group Inc. and its subsidiaries were affirmed with a stable outlook, including their A+ long-term and F1 short-term issuer default ratings, A+ long-term senior unsecured debt, A long-term subordinated debt, F1 short-term debt, B individual ratings and A preferred stock. The trust preferred securities of PNC Capital Trust C, D, E and the hybrid capital instruments of PNC Preferred Funding Trust I-III were also affirmed at A.

The rating actions follow the announcement of PNC's definitive agreement to acquire National City.

The Rating Watch positive reflects Fitch's expectation that National City's ratings will be aligned with those of PNC at closing.

The agency said that although PNC is not immune from the asset quality pressures facing the banking industry, PNC has fared better than many of its peers, and while every merger has integration risks, PNC's track record with previous acquisitions has been solid.

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