Fitch rates Sovereign converts BB

Fitch Ratings said it has assigned a BB rating to Sovereign Capital Trust IV's $700 million contingent convertible trust preferred income equity redeemable securities (PIERS). At the same time, Fitch is withdrawing its rating for Sovereign Capital Trust II's preferred stock, due to redemption.

Fitch said its rating for the PIERS is supported by Sovereign Bancorp Inc.'s financial condition, which continues to reflect sound asset quality, decent liquidity and adequate yet somewhat low relative to peers, capital.

Further Sovereign's profile incorporates a strong regional presence in New England and Pennsylvania and a solid level of earnings generation.

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