Fitch cuts Sovereign Bancorp view to stable

Fitch Ratings said it has affirmed the ratings of Sovereign Bancorp and its bank subsidiary, Sovereign Bank. Fitch has also revised the company's outlook to stable from positive.

Ratings affirmed include Sovereign Bancorp's long-term BBB- rating, short-term F3 rating and individual C rating and Sovereign Bank's long-term BBB rating, short-term F2 rating, BBB- senior subordinated debt rating.

Ratings placed on positive watch include Sovereign Bancorp, Inc.'s support 5 and Sovereign Bank's support 4.

Other ratings affirmed by Fitch include Sovereign Capital Trust I's preferred stock at BB, Sovereign Capital Trust IV's preferred stock at BB, ML Capital Trust I's preferred stock at BB and Sovereign Real Estate Investment Trust's preferred stock at BB+.

The outlook revision reflects the company's announced intent to acquire Independence Community Bank Corp., a New York-based thrift with $18.5 billion in assets, Fitch said. The acquisition of Independence is a two step transaction and is connected to Banco Santander purchasing a minority position (19.8%) in the Sovereign Bancorp.

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