Fitch Ratings has affirmed debt ratings for First Niagara Financial Group, citing the positive outlook for its pending $1.5 billion purchase of New Haven regional lender NewAlliance Bancshares.
Fitch affirmed its “BBB” long-term Issuer default rating for First Niagara and its subsidiaries. It also assigned a “stable” ratings outlook for the Buffalo, N.Y. banking company.
NewAlliance and First Niagara last week announced their plans to create a $29 billion banking enterprise with a footprint in Connecticut, Massachusetts and New York that rivals in size Connecticut’s Webster Financial and People’s United Bancorp.
Fitch said NewAlliance comes with a relatively healthy balance sheet with modest credit risk. Meanwhile, First Niagara has a reputation for successfully acquiring and integrating banks, while continuing to deliver good operating results.
One hitch, Fitch said, is that the NewAlliance deal follows closely on the heels of the April closing of First Niagara’s $4.2 billion acquisition of Harleysville National Corp. Â But the expected June 2011 closing of the NewAlliance purchase may provide First Niagara ample time to digest Harleysville, Fitch said.
