Moody's reviews Old National, First Midwest

Moody’s Investors Service said it placed its ratings on Old National Bancorp on review for downgraded and all its ratings for First Midwest Bancorp, Inc. on review for upgrade.

The announcement the banks will merge in an all-stock transaction prompted the reviews, Moody’s said.

Old National Bancorp’s long-term senior unsecured debt is rated A3 and First Midwest’s subordinated debt is rated Baa2.

Despite the positives of the transaction, Moody's said it is reviewing Old National for downgrade. On a stand-alone basis, the risk profiles of the companies differ materially as reflected by Old National’s a2 baseline credit assessment and First Midwest Bank’s baa1 BCA.

“Both Old National and First Midwest have strong acquisition integration track records, but this merger of equals is a first for each, which brings heightened risk in integrating cultures and operations,” the agency noted.

Moody’s said it is unlikely it will finish the reviews until after the deal closes.

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