PNC Financial Services Group Inc.’s (PNC) subsidiary, PNC Funding Corp., has raised $750 million by selling senior notes. The notes carry a coupon rate of 4.375% and mature on August 11, 2020. The offer size exceeded the initially planned $500 million.
Bank of America Corp. (BAC) and J.P. Morgan Chase & Co. (JPM) are the Lead managers while PNC and Morgan Stanley (MS) are the co-managers for this offering. Ratings from Moody’s Investor Services, unit of Moody’s Corp. (MCO), and Standard & Poor's are A3 and A, respectively. The proceeds from the sale would be used for general corporate purposes, the company said.
Last month, PNC Financial reported second-quarter net income of $1.47 per share, substantially ahead of the Zacks Consensus Estimate of $1.26 per share. Results also compared favorably with 14 cents per share in the prior-year quarter. Excluding 13 cents per share for integration costs, second quarter 2010 net income per share came at $1.60.
Strong results were attributed to higher revenue, lower expenses and stabilizing credit quality. PNC Financial efficiently completed the National City conversion of 16 million accounts, 6 million customers and 1,300 branches in nine states. Second quarter’s acquisition cost savings of $1.6 billion on an annualized basis has set aspirations for a new target of $1.8 billion by the end of year 2010.
The company continues to strengthen its balance sheet with focus on risk and expense management. These strategies should propel PNC Financial ahead. Moreover, benefits from the National City acquisition continue to exceed the company's expectations. However, loan growth still remains pressured reflecting the weak demand and slower loan repayments.
PNC Financial currently retains its Zacks #3 Rank, which translates to a short-term Hold rating and implies no clear directional pressure on the shares over the near term. Considering the fundamentals we are maintaining our Neutral recommendation on the stock.
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MOODYS CORP (MCO): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
PNC FINL SVC CP (PNC): Free Stock Analysis Report
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