Moody's ups Sovereign Bancorp ratings

Moody's Investors Service said it raised the long-term debt ratings of Sovereign Bancorp (senior to Baa3 from Ba1) and also upgraded the ratings on trust preferred securities to Ba1 from Ba2 issued by entities that are direct subsidiaries of the holding company.

The outlook on all Sovereign Bancorp's entities is stable.

Moody's said the upgrade of the holding company's ratings is based on improvement in the holding company's balance sheet, including lower debt used to support investments in subsidiaries (double leverage) and a more prudent liquidity profile. The upgrade reflects Moody's opinion that Sovereign Bancorp's management is not expected to increase double leverage and that the prudent liquidity profile of the holding company will remain.

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