S&P's Banco Itau ratings unaffected

Standard & Poor's said that the acquisition of BankBoston in Brazil through a stock swap and the exclusive rights to acquire BankBoston operations in Chile and Uruguay will not affect its ratings on Banco Itau SA (BB/stable/B). The acquisition is valued at R$4.5 billion and should be financed through the issuance of new nonvoting shares to be held by Bank of America Corp., which will control roughly 5.8% of Banco Itau Holding Financeira SA's total capital, considering the average stock price as of April 28.

The agency said the acquisition of BankBoston's operations will not materially affect Itau's strong financial profile and will reinforce Itau's business profile by adding about R$22.6 billion of BankBoston Brazil's assets to Itau's consolidated assets of R$151.2 billion, reducing its gap from the largest private bank, Banco Bradesco.

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