Fitch boosts Northern Rock

Fitch Ratings said it upgraded Northern Rock plc's long-term issuer default rating to A+ from A- and removed it from Rating Watch evolving and assigned a stable outlook.

The short-term issuer default rating was affirmed at F1+ and the support rating was affirmed at 1 and removed from Rating Watch negative.

Fitch said the upgrade reflects the extension until maturity of a government guarantee to the senior unsecured debt, which will be held by Northern Rock Asset Management plc from Jan. 1. After that, some assets and liabilities will be transferred to a new company that will maintain the Northern Rock plc name.

NRAM will manage the legacy assets as a going concern in a wind down. It will be entirely wholesale and government-funded.

The new company will hold the customer deposits, some performing residential mortgages and carry out new business, the agency said. The issuer default rating reflects the small amount of risk in its senior unguaranteed financial obligations.

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