S&P corrects omissions in PNC Financial ratings

Standard & Poor's Ratings Services said Wednesday it corrected its ratings on subsidiaries of PNC Financial Services Group Inc.

The changes follow the Pittsburgh-based bank's acquisition last fall of Cleveland-based National City Corp. for $5.6 billion. S&P said several legal-entity mergers associated with the acquisition were not reflected at the time the transaction closed.

S&P described the following changes:

_National City Bank Kentucky is merged into National City Bank, and the senior unsecured and subordinated debt issuances of National City Bank Kentucky are now obligations of National City Bank. S&P said that debt has been placed on "CreditWatch Negative," which means there is a 50 percent chance the ratings will be cut in the next three months.

_National City Bank is now being properly reflected as a subsidiary of PNC Financial Services. As such, all rating types and all outstanding debt issuances of National City Bank are on negative watch.

_National City Capital Trust IV is now being properly reflected as a subsidiary of PNC Financial Services. The 'BBB' outstanding junior subordinated rating is on negative watch. 'BBB' is an investment-grade rating two notches above junk.

_PFGI Capital Corp. is now being properly reflected as a subsidiary of PNC Bank NA, and the preferred stock of PFGI Capital Corp. now properly carries a 'BBB+' rating _ the third lowest investment-grade rating. The ratings on PFGI Capital Corp.'s outstanding preferred stock are on negative watch.

"The actions are required to correct several erroneous CreditWatch omissions," S&P credit analyst John Bartko said.

Wednesday's moves came after S&P on May 4 placed PNC Financial Services and 22 other regional and national banks on CreditWatch Negative. The negative watch is tied to an ongoing industrywide review S&P is conducting on the financial services sector, which has been battered for nearly two years by the credit crisis and ongoing recession.

Shares of PNC Financial Services fell $1.54, or nearly 3.7 percent, to close at $40.33 on Wednesday.