Fitch affirms Merrill Lynch, Bank of America

Fitch Ratings said it affirmed Merrill Lynch & Co., Inc.'s long-term issuer default rating and senior debt at A+, its subordinated debt and preferred stock at A and the group's trust preferreds at A.

The agency also upgraded the group's short-term ratings to F1+ from F1 and the long-term issuer default ratings of the company's banking subsidiaries to AA- from A+.

Fitch also affirmed Bank of America Corp.'s ratings, including its A+ long-term issuer default rating and senior debt, A long-term subordinated debt and preferred stock and the group's F1+ short-term ratings and A trust preferred ratings.

Merrill Lynch's ratings were removed from Rating Watch evolving. The outlook is stable.

The rating actions follow the completion of Merrill Lynch's acquisition by Bank of America. The agency said the merger's strategic and long-term benefits offset shorter-term challenges and that the addition of Merrill Lynch's investment banking, merger-and-acquisitions and capital-market activities will bring Bank of America into the front ranks of global investment banks.

The combined entity faces a number of challenges, Fitch said: Integration risk is significant due to Merrill Lynch's size and complexity as well as the cultural differences between a commercial bank and an investment bank, and management is already faced with the integration of Countrywide and the 2007 acquisition of LaSalle Corp.

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