CHICAGO, May 17 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR) has
placed the ratings for Advanta Corporation and its subsidiaries on Rating
Watch-Developing, following the company's announcement that it has hired
Salomon Smith Barney to explore strategic options for its mortgage lending and
leasing operations. The ratings covered by the Rating Watch are detailed at
the end of this release.
The company has made positive enhancements to the operating platforms of
both the mortgage and leasing operations during the past year. The strategic
focus has shifted from growth to profitability, and management has allocated
significant resources to improve technology and efficiency across all business
lines. Nevertheless, profitability in the mortgage operation has been
marginal and the leasing business has been operating at a loss in recent
quarters. The strategic options for the mortgage and leasing business lines
could include a joint venture relationship, strategic partnership or outright
sale.
Increased attention on the company's business card operation should lead
to improved profitability and lower leverage going forward. However, the
expected improvement in financial performance will need to be considered in
relation to the reduction in business line diversity. The resolution of the
Rating Watch and/or any adjustment in the ratings is dependent on the outcome
of this process and the company's ultimate course of action.
Ratings affected by this announcement:
Advanta Corporation
Senior Medium-Term Notes 'BB+' (Double-B-Plus)
Preferred Stock 'BB-' (Double-B-Minus)
Advanta National Bank
Senior Bank Notes 'BBB-' (Triple-B-Minus)
Short-Term Obligations 'D-2' (D-Two)
Advanta Capital Trust
Preferred Stock 'BB-' (Double-B-Minus)
For additional information, visit DCR's Web site at http://www.dcrco.com
(Quick Search: Advanta). DCR's research is also available on Bloomberg at
DCR, FirstCall's BondCall Direct/Research Direct at
http://www.firstcall.com and Multex at http://www.multex.com, as well as
through other third-party providers.
SOURCE Duff & Phelps Credit Rating Co.
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Related links:
http://www.dcrco.com
CONTACT:
Lawrence G. Meding, CFA, 312-606-2339,
meding@dcrco.com, or Jonathan A. Kingsepp, CPA, 312-368-3120,
kingsepp@dcrco.com
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