On March 20, 2007 Standard&Poor's Rating Services affirmed its 'BBB+/A-2' issuer credit ratings on Bank of Queensland (BoQ) and revised the outlook on the ratings to positive from stable. These rating actions follow the announcement that BoQ has approached Bendigo Bank Ltd. (Bendigo Bank; BBB+/Positive/A-2) with a merger proposal. If the merger proceeds, the combined group's scale and geographic diversity will be strengthened, although funding, capital, and integration risks will need to be addressed. Standard&Poor's expects the ratings to be raised in the next one-to-two years as the benefits from the proposed transaction are progressively realized. The proposed funding for the merger is through a share-swap arrangement and cash raised through a rights issue, which partly
