Fitch Ratings has given ABN AMRO Mellon Global Securities Services Long- and Short-term ratings of ‘AA-‘ (AA minus) and ‘F1+’, respectively.
ABN Amro Mellon says the ratings reflect the support that Fitch believes will be available to creditors and counterparties of ABN AMRO Mellon from the joint venture partners by virtue of joint and several declarations filed by ABN AMRO Bank N.V. and Mellon Bank N.A. with the Chamber of Commerce in Amsterdam under Article 2:403 of the Dutch Civil Code.
The ‘403 Declaration’ makes the joint venture partners as parent companies jointly and severally liable for the valid and binding contractual debt obligations of the subsidiary (including damages resulting from a failure to perform) It furthermore provides the subsidiary with an exemption from the obligation to prepare and publish full audited annual accounts due to the fact that the financials of the subsidiary will be consolidated into the audited accounts of the parent companies. In accordance with the Dutch Civil Code it is possible for (one of) the parent companies to withdraw their respective ‘403 Declaration’ and under certain conditions the residual liability under that ‘403 Declaration’ can be terminated.
However, Fitch takes comfort from the express commitment by the joint venture partners that the ‘403 Declaration’ will not be revoked, other than with the consent of the other partner, as long as each remains a shareholder of the subsidiary. Fitch also believes that the existence of the ‘403 Declaration’ demonstrates a willingness by the partners to support other ABN AMRO Mellon obligations that may not be explicitly covered by the ‘403 Declaration’.
ABN AMRO Mellon was established in January 2003, although its roots date back to a marketing alliance between the two partners established in October 1998. The company provides global custody and related services to clients around the world with the exception of North America. At 31 July 2004 the company had 163 clients in 27 countries.