Standard& Poor's on April 12 affirmed the national long-term rating of Merrill LynchMe´xico Casa de Bolsa, the brokerage unit of Merrill Lynch Mexico SA de CV, at mxAAA with a stable outlook.The firm's short-term rating was affirmed at mxA-1+.
The ratingsreflect the firm's strategic importance to its parent, Bank of America Corp., as well as its strong capitalizationlevel supported by its internal capital generation, moderate risk profile and adequateliquidity, S&P said.
However,they also consider its weak business position due to its concentration of incomein intermediation on behalf of third parties and trading of shares. Its relativelylow funding level without a stable base of depositors was also a factor, S&Psaid.
Nevertheless,the brokerage's activities remain strongly linked to its parent's reputation, S&Psaid. "The brokerage is almost essential to the identity and future strategyof Bank of America," S&P said, adding the rest of the group could supportthe subsidiary "under almost any foreseeable circumstance."
The stableoutlook reflects S&P's expectation that the brokerage will maintain the samebusiness focus with a strong level of capitalization and will retain its statusas a highly strategic subsidiary to its parent company.