ABN AMRO Mellon Global Securities Services, the joint venture bank between Mellon and ABN Amro whose future is now tied to the recently announced acquisition of Mellon by Bank of New York, says Fitch has changed its rating Outlook to Positive from Stable.
Its ratings are affirmed at Issuer Default as AA- (AA minus), Short-term F1+ and Support 1. The new Outlook follows the recent Outlook change of parent Mellon Bank N.A. to AA- (AA minus).
Fitch says the ratings reflect the support provided by the parents in the form of joint and several declarations filed under Article 2 403 of the Dutch civil code. This ‘403 Declaration’ makes the parents jointly and severally liable for the valid and binding contractual debt obligations of the subsidiary. As a result, Fitch considers that there is an extremely high probability of support from the joint venture parents in case of need.
Although the ‘403 declaration’ is not irrevocable, Fitch says it takes comfort from the express commitment by both parents that it will not be revoked, other than with the consent of the other partner, as long as each remains a shareholder of the subsidiary. In the event of revocation, existing obligations will be ‘grandfathered’ for all clients. Fitch also considers that the ‘403 Declaration’ demonstrates a willingness by the partners to support the bank’s other obligations that may not be explicitly covered by the ‘403 Declaration.’ Provided the ‘403 Declaration’ remains in place, the ratings of will be driven by the Issuer Default ratings of the joint venture partners.
ABN Amro Mellon was established in January 2003, although its roots date back to a 1998 marketing alliance between the two partners. The company is domiciled in The Netherlands with branches in London, Frankfurt, Luxembourg, and Singapore, and employs over 400 people.
ABN AMRO has a Stable Outlook and Mellon has a Positive Outlook.