Fitch affirms Wells Fargo, upgrades Wachovia

Fitch Ratings said it affirmed Wells Fargo & Co.'s long-term issuer default rating and senior debt at AA, short-term issuer default rating and debt at F1+, subordinated debt and preferred stock at AA-, individual rating at A/B, support rating at 5 and support floor at "No Floor."

Fitch also upgraded Wachovia Corp.'s long-term issuer default rating to A+ from BB-, short-term issuer default rating and debt to F2 from B, preferred stock to A- from B+ and individual rating to C from D. Its A+ senior long-term debt rating, A subordinated debt rating, 5 support rating and "No Floor" support floor are unchanged.

Wachovia's ratings were placed on Rating Watch positive.

The agency said Wells Fargo's definitive agreement to acquire Wachovia and subsidiaries is a vastly improved deal for bondholders - compared to the Citigroup Inc. deal - that more than doubles Wells Fargo's balance sheet and branch network and offers Wells Fargo the opportunity to transform itself into a coast-to-coast banking.

The upgrade of Wachovia's ratings reflects the reduced uncertainty regarding the creditworthiness of the Wachovia holding company following closing, Fitch said. In the transaction with Citigroup, the holding company was to remain independent.

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