Moody's may up Allied Banking debt

Moody's Investors Service said it placed Allied Banking Corp.'s local-currency subordinated debt on review for possible upgrade. The rating action follows shareholder approval of its merger with Philippine National Bank, which is rated B1/not-prime/E+. All other ratings of the bank are not affected.

Moody's said the Allied Banking's creditors should benefit from the merged entity being a larger company with a more extensive branch network and a much larger market share within the Philippines.

The negative impact of merger-created goodwill, which must be deducted from tier 1 capital, will be more than offset by the active capital-raising activities of both banks before the formal merger, Moody's said.

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