On March 7, 2005, Standard&Poor's affirmed its ratings of Capital One Financial Corp. (Capital One), including its 'BBB- counterparty rating and those of its subsidiaries. At the same time, Capital One's outlook was revised to positive from stable. The outlook revision follows Capital One's announcement that it has entered into an agreement to acquire Hibernia Corp. (Hibernia). Standard&Poor's views the combination as an incremental step to Capital One's longer term business strategy that includes becoming a well-diversified leader in consumer lending. The value of the transaction lies in the potential that exists in Hibernia's existing Texas franchise. Though Hibernia has a commanding position in its native Louisiana, that market is generally not considered a high-growth market.
