Fitch places debentures of DSP Merrill Lynch on Watch

NEW DELHI: Global rating agency Fitch on Friday placed DSP Merrill Lynch Capital Ltd's Rs 1,500-crore guaranteed long-term debenture programme on Rating Watch Evolving (RWE) following the decision to acquire Merrill Lynch by Bank of America earlier this week.

"This action follows the placement of the company's ultimate owner Merrill Lynch & Co on RWE as a result of the proposed acquisition by Bank of America this week," Fitch said in a release.

DSPMLC, a wholly-owned subsidiary of DSP Merill Lynch, is engaged in asset-backed finance which involves self-originated loans as well as portfolio acquired for trading, securities-backed lending, IPO funding and proprietary trading.

DSP Merill Lynch is 90 per cent owned by US-based Merrill Lynch.

It said the company's national long-term ratings are based on an explicit guarantee from the parent firm Merrill Lynch.

The RWE would be resolved once adequate clarity emerges over the status of this guarantee under the new corporate structure, it said.