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Fitch upgrades PacWest Bancorp
Fitch Ratings said it upgraded the long-term issuer default ratings for PacWest Bancorp (PACW) and Pacific Western Bank (PWB) following the Nov. 30 close of its merger into unrated Banc of California, Inc. to BBB- from BB+. The outlook is now stable
“The ratings upgrades reflect the positive resolution of the rating watch evolving (RWE), which Fitch placed on PACW at the time of the merger announcement. The RWE reflected Fitch's view of the potential positive attributes of the transaction, including an improved funding profile, which along with operational efficiencies, Fitch expected would improve the bank's earnings profile and internal capital generation. However, it also reflected downside implications, including a potential setback to PACW's plan to restructure its balance sheet, should the deal fail to close,” the agency said in a press release.
With the deal’s closure, Fitch said the downside risks as resolved, Fitch said.
“Fitch upgraded the ratings as a result of positive adjustments to the capitalization and leverage and funding and liquidity factor scores,” the agency said. It also withdrew PACW’s ratings since the company no longer exists.
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