Moody's: Riggs view uncertain

Moody's Investors Service said it changed the outlook on Riggs National Corp. (subordinated debt at Ba2) to direction uncertain. Moody's had placed the ratings of Riggs on review for upgrade on July 16 following the announcement that PNC Financial Services Group had signed a definitive agreement to acquire Riggs.

Moody's said that the outlook change was prompted by its concern over legal developments affecting Riggs subsequent to the acquisition announcement. These developments have raised the probability that the acquisition of Riggs by PNC might not be completed as envisioned in the agreement.

Since the acquisition was announced, a lawsuit on behalf of the victims of the Sept. 11 attacks and their families has been filed against Riggs and an investigation of Riggs by the U.S. Department of Justice is reportedly underway. Moody's said these developments could impact Riggs' ability to meet certain terms and conditions agreed with PNC for the acquisition to proceed.

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