Fitch places PacWest on evolving watch

Fitch Ratings said it revised the rating watch on PacWest Bancorp's (PACW) and its bank subsidiary Pacific Western Bank's BB+ long-term issuer default ratings to evolving from negative. fitch expects to resolve the rating watch upon the close of the announced merger with Banc of California, Inc. (BANC).

The change to rating watch evolving follows PACW's announced merger with BANC in an all-stock deal valued at about $1 billion, with PACW shareholders getting roughly 0.66 of a share of BANC common stock for each share of PACW common stock. According to the terms of the transaction, BANC will be the legal acquirer, whose bank subsidiary Banc of California will merge into Pacific Western Bank, which will then take the Banc of California name. The deal is expected to close in late 2023 or early 2024.

“The rating watch evolving reflects the potential for ratings to be upgraded, downgraded or affirmed at their current levels, pending the close or termination of the transaction,” Fitch said in a press release.

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