NEW YORK (Standard&Poor's) Nov. 20, 2006--Standard&Poor's Ratings Services said today that it affirmed its 'A+/A-1' counterparty credit rating on Fifth Third Bancorp (Fifth Third) as well as on Fifth Third's bank subsidiaries (AA-/Stable/A-1+). The affirmation follows the company's announcement of plans to sell $11.5 billion of investment securities and terminate $1.1 billion of repurchase and reverse repurchase agreements, and utilize the proceeds principally to reduce related borrowings. These transactions will result in the recognition of a pretax loss totaling approximately $500 million in the current quarter. Fifth Third's prior strategy of investing in fixed-rate securities (largely MBS), funded with floating-rate, wholesale borrowings, led to significant pressure on its net interest margin during the past two years.
