Fitch affirms Grupo Financiero Continental

Fitch Ratings said it affirmed the ratings of Panama-based Grupo Financiero Continental and Banco Continental de Panama and Subsidiaries following the announcement that Grupo Financiero has reached an agreement to acquire the medium-sized Panamanian Banco Atlantico from Spain's Banco Sabadell for $96 million. The acquisition will be completed by Banco Continental de Panama.

The acquisition will somewhat pressure Grupo Financiero's capital adequacy, given the absorbed assets and goodwill created in this transaction - roughly $40 million, the agency said.

However, this will be partially offset with the issuance of preference shares or similar securities by Banco Continental de Panama for up to $50 million, which will help to offset pressure from the acquisition on its core capital adequacy (end-2005: 10.4%).

Fitch said the affirmation and stable outlook reflect its belief that based on information currently in hand, their financial profile is likely to remain unchanged with this acquisition of Banco Atlantico.

The following ratings have been affirmed: Grupo Financiero Continental's long-term issuer default rating BBB-, short-term F3, individual C and support 5 and Banco Continental de Panama SA and Subsidiaries' long-term issuer default rating BBB- and short-term F3.

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