Advanta Exits

Reeling from a number of miscues during the past twelve months Advanta reached a definitive agreement yesterday to sell the bulk of its $10.5 billion credit card portfolio to Fleet Financial Group. The agreement will produce an after-tax gain for Advanta of $500 million. Advanta estimated Tuesday the total value of the transaction to be $1.3 billion. The purchase will move Fleet into the “Top Ten” of bank credit card issuers. According to third quarter data gathered by CardData, the combined portfolio will have total receivables of $12.6 billion. Fleet will therefore become the nation’s ninth largest issuer, based on outstandings, surpassing #10 Optima. Fleet’s customer base will grow from 2.3 million to about 8.3 million accounts.

Advanta’s meltdown began last fall following the launch of its partnership program with American Express involving the ‘Rewards Accelerator’ VISA and MasterCard which linked AmEx’s rewards program to a VISA and MasterCard. Advanta became embroiled in trademark litigation with VISA and MasterCard over the product and eventually, after challenging the card associations, agreed to terminate the program. At the time Advanta’s portfolio peaked at $12.9 billion. During the fourth quarter the company lost key executives followed by a $20 million operating loss in the first quarter of this year. In a effort to regain profitability Advanta engaged in an portfolio-wide repricing which boosted average cardholder interest rates by 300 basis points. Advanta also boosted fees, introducing account closing and dormancy fees. Since the peak at the end of the third quarter last year Advanta’s portfolio dropped to $12.7 billion (4Q96), $12.2 billion (1Q97), $11.2 billion (2Q97), to $10.5 billion (3Q97) according to RAM’s CardData. The shrinkage has been largely attributed to tighter underwriting and higher attrition from the repricing efforts.

Fleet said yesterday management of the combined Fleet and Advanta portfolio will initially report to Fleet vice chairman H. Jay Sarles. Mr. Sarles’ first assignment is to recruit a CEO for its new credit card operations. Approximately 1900 Advanta employees will join Fleet.


The New Advanta

While the company is unloading its consumer credit card portfolio Advanta said it will retain its corporate card business. Receivables for Advanta’s business card products have risen from $218 million last year to $606 million at the end of the third quarter, according to CardData. Advanta is also retaining its mortgage and business services companies. Advanta National Bank and Advanta Financial Corp, the company’s two banks, will also remain. Advanta announced also announced Tuesday it will buy back about $800 million of its common stock after the transaction. The company estimates its book value will be about $650 million next year. Advanta will have combined managed assets of $8.4 billion and an additional $10.3 billion of mortgage contracts serviced.


A Rewards Program that Works

Do consumers really take advantage of those rewards that retailers offer to frequent shoppers? In the case of store gift certificates offered to private label charge card holders, the answer is apparently a resounding “yes.”

A recent study of consumer buying habits by Shoppers Charge Accounts Co. (SCA), found that 88% of all gift certificates mailed under its Prestige Points rewards program were redeemed. Moreover, the frequent shopper gift certificate program spurred the cardholders to increase their spending by an additional 48%. In effect, a gift certificate-holding customer will spend an average of $148 for every $100 of the certificate’s face value, the study reported.

The six-month study involved 30 SCA merchants operating more than 200 stores. With SCA’s Prestige Points frequent shopper program, free gift certificates are mailed to cardholders when their charged purchases at the participating merchant reach designated dollar values.

“This is a ‘win-win’ situation for customers and retailers alike,” said Ed Fechner, senior vice president of Mahwah, N.J.-based SCA, which administers private label charge card programs for chain and independent retailers nationwide. “Customers benefit by receiving a valuable gift certificate while retailers find such programs generate additional sales and traffic. Cardholders have an incentive to shop at the store to earn points towards the reward. Then, when returning to buy goods with the gift certificate, these customers’ purchases exceed the certificate’s face value.

SCA is a division of the Hudson United Bank subsidiary of HUBCO (Nasdaq: HUBC), a New Jersey-based bank company. HUBCO currently operates a total of 85 branches in New Jersey and Connecticut with assets exceeding $3 billion.


Fleet Rated by Fitch

Fleet Financial Group’s senior debt is affirmed at ‘A’ by Fitch, following its announced intentions to acquire the credit card operations of Advanta Corp. In addition, Fleet’s commercial paper is affirmed at ‘F-1’ and its subordinated debt and preferred stock at ‘A-‘. The purchase premium for Advanta’s approximately $11.5 billion of managed credit card receivables appears appropriate, given Fitch’s assumptions about expected chargeoffs and delinquency experience over the next two years. Fleet will combine its existing $2.7 billion credit card portfolio with the acquired business, creating the ninth largest U.S. based credit card organization. The purchase is expected to close early in 1998.

The ratings reflect Fleet’s acquisition-minded expansion plans, as the company has pending the addition of an institutional asset manager, the discount broker Quick & Reilly, and Advanta’s portfolio. While the balance sheet addition of these three will represent a modest 10% increase in assets by the end of 1998’s first quarter, the nature of competitive risk in discount brokerage, as well as asset quality considerations of the credit card operations in the event of an economic slowdown, could impart some uncertainty to both fee and interest sensitive revenues. Fitch’s concerns also include the inherent challenges of integrating and managing new operations and implementation of the necessary control procedures.

Pro forma for these acquisitions, Fleet will become the eleventh largest bank in the nation, adding approximately $8.2 billion of assets. Fleet has terminated its share buyback program and intends to temporarily leverage excess capital in its securities portfolio. Fitch expects the company will continue to maintain capital ratios at or near current levels, which presently are above well capitalized minimums.

The ‘A+/F-1’ long-term certificates of deposit and deposit note ratings of Fleet’s subsidiary banks, Fleet National Bank, Fleet Bank (NY), Fleet Bank N.A., Fleet Bank of Maine and Fleet Bank-NH, are also affirmed. Furthermore, the ‘A+/F-1’ structured finance rating for Fleet National Bank and the ‘A-‘ rating for Fleet Capital Trust II’s trust originated preferred securities are affirmed.


FIC to Process BestBank Cards

First Independent Computers Inc., a subsidiary of Columbia Capital Corp., announced today that it has signed a processing contract with BestBank, Boulder, Colorado, to process BestBank’s credit card portfolios.

Kenneth A. Klotz, president of First Independent Computers (FIC), said the value of the contract to FIC is estimated to be approximately $12 million annually in processing revenue. He said that BestBank, a major credit card issuer, turned over to FIC the processing of approximately 300,000 VISA accounts previously processed by First Data Corp.

BestBank also anticipates that this portfolio will grow by a minimum of 300,000 accounts during the next year due to aggressive marketing programs.

First Independent Computers, headquartered in Abilene, Texas, is involved in credit card service support and transaction processing; banking/financial services and data processing; and document management and distribution services.


Mail Boxes Etc. Credit Card Activated Biz Kiosks

Mail Boxes Etc. Tuesday announced that it has entered into a joint venture with USA Technologies Inc..

Under the terms of the agreement, the companies will co-market MBE Business Express, 24-hour-7-days-per-week, fully automated business center kiosks for business travelers.

MBE Business Express provides credit card-activated, self-service systems for business travelers and consumers who need to use personal computers, printers, copiers and fax machines while they are away from their office or home. A simple swipe of any major credit card activates the office equipment and computer stations that offer many popular software programs as well as access to the Internet. Each MBE Business Express unit also will feature dial-through capability to a nearby Mail Boxes Etc. center for additional business, communications and postal services.

“Our joint venture with USA Technologies means we can provide important services at convenient locations to help make business easier for small-business/home-office workers,” said James Amos, president and chief operating officer of Mail Boxes Etc. “Business persons who struggle with increasing workloads, looming deadlines and unfamiliar surroundings will soon know to look for MBE Business Express units during their travels.”

“Entering into this joint venture with a well-known business brand name such as Mail Boxes Etc. is certainly an important milestone for our emerging company,” said George R. Jensen Jr., president and chief executive officer of USA Technologies. “This agreement is particularly noteworthy in that it opens up significant short- and long-term opportunities for both companies.”

An MBE Business Express unit will be unveiled at the International Hotel, Motel & Restaurant Association convention on Nov. 8, 1997.

Mail Boxes Etc., with headquarters in San Diego, is the world’s largest franchisor of retail business communication and postal service centers. There are more than 3,400 MBE centers operating worldwide, with master licensing agreements in place for the development of the MBE business in 58 countries around the world. In the United States, MBE centers are owned and operated by licensed franchisees of Mail Boxes Etc., USA Inc. Outside the United States, MBE centers are owned and operated by master licensees or their franchisees. MBE maintains a Web site at .

USA TEchnologies is a leading owner and licensor of networked, credit card-activated control systems for the personal computer, copier, facsimile and vending industries. The company’s proprietary technologies make available unattended, point-of-sale control systems for credit card payments.


MCS Goes nFront

Modern Computer Systems, Inc. (MCS) announced today that it has selected nFront, a leading provider of Internet banking solutions for community banks, to provide the nHome(tm) Internet banking solution to its customer base. Headquartered in Burnsville, Minnesota, Modern Computer Systems, Inc. (MCS) is a leading developer and provider of in-house banking software to financial institutions worldwide.

“Most of the Internet banking providers in the marketplace today haven’t actually completed a product, and those who have are currently targeting only the largest banks in the United States and around the world,” said Ronald L. Ingersoll, president and CEO of MCS. “In addition to actually being in-use across the country, nFront’s nHome is both a powerful and affordable solution that gives community banks a competitive edge in providing their customers with secure Internet banking services.”

MCS’s flagship product is the BankServ System, a core data processing system for community banks. Under the agreement, MCS will market the nHome solution to its customer base. BankServ interfaces with nHome to offer community bankers a complete package of item processing, account processing, bill payment and Internet banking services.

“We partnered with MCS because we felt they also have the same dedication to developing and servicing their products as we do,” said Tripp Rackley, president of nFront. “MCS is committed to delivering the best product to their customers, and we are here to support that goal when it comes to Internet banking. By combining MCS’s solutions with nHome, community banks will have a powerful and affordable tool to better meet the banking needs of their customers.”

“MCS and nFront have both carved a strong market niche with community banks,” continued Ingersoll. “By partnering, our companies can continue to provide community banks with high-tech, high-touch computer solutions. Community banks can now compete at the highest level against their larger bank competition by offering a secure banking environment at an affordable price.”

The nHome solution offers community bank customers full-service Internet banking, allowing their customers to open new accounts, apply for loans, view account balances and history, transfer funds, pay bills electronically, view personal information on record at the bank, generate reports based on customer activity, download Active Statements into personal financial management software, interact with customer representatives via e-mail, and have access to a bank that is open 24 hours a day, 365 days a year. Currently, 12 banks are using the nHome Internet banking solution.

Founded in 1996, nFront owns the registration rights of the domain name. nHome supports the highest level of data encryption available today and runs on the Windows NT operating system. nFront is also a Microsoft Solution Provider.

For more information on nFront and Internet banking solutions, contact Alan Powell, (706)-369-3779 ext. 234, [email protected] ; or write to nFront at 1551 Jennings Mill Rd., Suite 800A, Bogart, GA 30622.


SoftCart to use PGP

Mercantec, Inc., (), a leading provider of open retail electronic commerce solutions, today announced it has signed an agreement to incorporate Pretty Good Privacy, Inc.’s PGP encryption software with its Mercantec SoftCart virtual store application. The agreement will make PGP’s encryption an integral part of the SoftCart virtual store software package, as opposed to requiring on-line merchants to purchase additional security software and integrating it themselves.

By integrating PGP’s encryption, the strongest commercially available (no less than 128 bits), Mercantec SoftCart becomes the first virtual store software to incorporate PGP’s protection at the server level as a turnkey part of its offering. SoftCart has always supported SSL encryption to protect shoppers’ credit card information over the Web. In addition, Mercantec has encouraged merchants to use PGP encryption from the time the order is complete until a merchant retrieves the order on his own PC. Integrating PGP into SoftCart now makes the process of protecting customer orders from potential hackers at an ISP’s server or merchant’s own Web server simple and invisible to the merchant.

“Web merchants and consumers are concerned about stolen credit card numbers and orders on the Internet, so Mercantec wants to ensure we’re doing all we can to make it easy to protect SoftCart merchants and their on-line customers,” said Bill Tait, vice president, product management at Mercantec, Inc. “Mercantec is removing what might have been potential barriers to utilizing the strongest security possible for merchants. Now even if the server or the merchant’s PC is illegally accessed, merchants can rest assured that their transactions will still be secure.”

PGP technology protects the privacy and security of on-line e-mails and files with the strongest encryption commercially available, compared to messages encrypted with standard 40-bit technology. By integrating PGP with SoftCart, any information that SoftCart receives on a merchant’s on-line store, such as credit card numbers, customer orders or files, will automatically be encrypted by SoftCart and can only be decrypted at the merchant, or client, level. SoftCart including PGP will be released in first quarter 1998. Current SoftCart customers will receive the upgrade free, as part of their licensing agreement.

“We’re pleased that a leader in electronic commerce retail software chose to license PGP’s technology, which offers the strongest protection possible for merchants on the Internet today. The flexible architecture of both PGP and SoftCart allows merchants to easily and cost-effectively realize the benefits of secure e-commerce,” said Olivia Dillan, vice president, product development at PGP. “By integrating PGP with SoftCart, Mercantec has demonstrated that it truly cares about the security of its on-line merchants — and their customers.”

About Pretty Good Privacy, Inc.

Pretty Good Privacy, Inc. based in San Mateo, California, is the pioneer and leading provider of applied cryptographic solutions for securing corporate digital assets and protecting individual privacy. PGP is committed to providing the most advanced security products for the digital age, safeguarding the communication and storage of information. With over four million users in 50 countries, and translations into 25 languages, PGP is the worldwide de facto standard for Internet email and file encryption. For more information, visit our Web site at

About Mercantec, Inc.

Since its founding in 1995, Mercantec, Inc., has become the leading provider of open retail electronic commerce software. Mercantec SoftCart software enables merchants to expand their geographic reach by marketing and selling goods and services via the World Wide Web. Mercantec has partnered with a worldwide network of more than 60 Internet Service Providers (ISPs) and Web hosting service providers, including Hiway Technologies, MindSpring, and PSINet, to offer affordable hosting and electronic commerce solutions to merchants. Mercantec’s other distribution channels include American Express, Web consultants, software developers, integrators and OEMs, including Tandem Computers. SoftCart utilizes StateTrack technology to provide 100 percent shopper privacy.

Mercantec SoftCart supports all known Web servers including Microsoft, Netscape, Spyglass, and APACHE. Mercantec SoftCart runs on Windows NT, Windows 95 and the most popular UNIX platforms including Sun Solaris, SGI IRIX, Linux, SCO UNIX, HP/UX, Free BSD and BSDI.

Mercantec is headquartered in Lisle, Ill. To learn more about Mercantec, visit the company Web site at


Fitch Rates New Advanta

Advanta Corp.’s (and related entities) debt remains on FitchAlert evolving, following the company’s announcement it will contribute its consumer credit card business and related debt and deposits to a newly formed limited liability company that will be roughly 99% owned by Fleet Bank (senior debt rated ‘A’) and 1% owned by Advanta, says Fitch. A list of the approximately $2.9 billion of deposits and $2.5 billion of debt of Advanta and Advanta National Bank (ANB) affected follows below. Fleet will be paying a premium of roughly $500 million, in addition to the assumption of roughly $2.3 billion of ANB’s debt and deposits. Subsequent to the transaction, Advanta will initiate a tender offer for roughly $750-$850 million of the company’s class A and B common stock.

Ratings on the debt and deposits of ANB that will be transferred to the new company are expected to be raised to the ratings of Fleet Bank. Ratings on the debt of Advanta and the obligations of ANB that will remain with Advanta will either be affirmed or lowered depending on a full due diligence of the remaining operations. Ratings on the banks’ asset-backed securities transactions are not affected by this action.

Advanta, with $16.3 billion of total managed receivables at Sept. 30, 1997, has historically been concentrated in the credit card sector, with roughly 80% of its revenues represented by that line and the remainder coming primarily from the mortgage business and a small ticket leasing and business credit card operation.

The disposition of Advanta’s $10.5 billion credit card portfolio eliminates a large element of risk from the company, as that portfolio has been suffering from substandard asset quality performance. Margins, which fell significantly, started to recover during the second and third quarters of 1997, as the company implemented broad-scale risk-based repricing programs and tightened underwriting and collection efforts. The portfolio has also been shrinking, due to tighter underwriting and higher attrition from the repricing efforts.

However, Advanta will be substantially smaller and highly concentrated in the mortgage sector. After the disposition of the credit card receivables, pro forma managed receivables of roughly $5.8 billion will be comprised nearly 80% of mortgage receivables. The mortgage business, which focuses on the nonconforming segment of the home equity loan market, has been growing rapidly. Managed receivables nearly doubled to roughly $4.6 billion at Sept. 30, 1997 from $2.3 billion a year earlier. In addition, the contract servicing portfolio increased over four-fold in the last year to $8.9 billion at Sept. 30, 1997.

After the disposition of the credit card assets and the tender offer for the company’s common stock, Advanta’s equity will decline to $646 million from $980 million. Each of these figures includes $100 million of capital securities. Leverage will decline substantially, with equity to managed assets increasing to a strong 7.2% from 4.7% at Sept. 30, 1997.

Issues affected are:
Advanta Corp.
‘BBB’ medium-term notes
‘BBB’ medium-term notes, series C
‘BBB’ medium-term notes, series A shelf registration
‘BBB’ medium-term notes, series B shelf registration
‘BB+’ stock appreciation income linked securities (SAILS)
‘BB+’ capital securities (Issued by Advanta Capital Trust I)
Advanta National Bank
‘BBB’ subordinate notes
‘BBB’ subordinate notes shelf registration
‘BBB+/F-2’ certificates of deposit
‘BBB+/F-2’ bank notes
‘BBB+/F-2’ bank notes shelf registration


The Axe Drops

Among casualties of yesterday’s Advanta-Fleet transaction are Advanta CEO Alex W. “Pete” Hart, and Jim Allhusen, who served as group executive of Advanta Personal Payment Services. Advanta’s chairman and largest shareholder, Dennis Alter, will reclaim the CEO position from Hart. The company simply said the two top executives will “leave to pursue other interests”.


DCR Rates New Advanta

Duff & Phelps Credit Rating Co. (DCR) has placed the ratings for Advanta Corp. and its subsidiaries on Rating Watch– Uncertain and has reaffirmed the ratings of Fleet Financial Group and its subsidiaries. The entities affected by today’s rating action are listed below. The rating action is in response to the announcement today that the companies have reached a definitive agreement whereby Fleet Financial Group will acquire Advanta’s consumer credit card business. Fleet will also assume a portion of Advanta National Bank’s liabilities. The ratings of the liabilities assumed by Fleet will be raised to the ratings of Fleet’s bank subsidiaries. The amount and specific identity of the debt and deposit obligations to be assumed by Fleet will be determined at closing.

Currently, Advanta possesses $10.5 billion of managed credit card loans, which represents the company`s largest business. After the transaction is completed, Advanta will have a managed loan portfolio of slightly less than $6 billion, which is highly concentrated in non-conforming mortgage loans. DCR recognizes that the disposition of the credit card operation eliminates a business that has produced highly volatile results for Advanta in recent periods. The Rating Watch–Uncertain status reflects a balance between certain quantitative strengths the ‘new’ Advanta will possess, with uncertainty surrounding the strength of Advanta’s franchise in non-conforming mortgages and small-ticket business leasing.

The ‘new’ Advanta will possess a strong level of liquidity and leverage measures that are projected to be superior in comparison to the level Advanta has carried in the past. After consideration of a planned tender offer of $750 to $850 million of common stock, tier equity I to managed assets will approach 8 percent. The relatively higher level of liquid assets on the balance sheet combined with the high degree of liquidity associated with residential mortgage loans will provide Advanta with a strong level of liquidity. DCR believes the positive momentum established in Advanta’s mortgage and leasing businesses warrants retention of the current ratings in the near-term. However, the long-term prospects of Advanta’s ability to effectively and profitably compete in two businesses that are a keen focus of numerous larger financial services providers needs to be evaluated. Further, Advanta’s long-term strategic direction for its business will need to be assessed to evaluate management’s outlook for its business mix and financial performance targets. The reaffirmation of Fleet Financial Group reflects DCR’s belief that the acquisition does not materially alter Fleet’s risk profile. While the transaction will result in a modest increase in leverage, it also enhances Fleet’s earnings and geographic diversification.

The combination of Fleet’s risk management discipline and Advanta’s marketing expertise should allow the company to effectively compete in the rapidly evolving credit card industry. Further, Fleet’s success with recent acquisitions mitigates concerns associated with the integration of Advanta`s credit card operations. DCR believes the separate and specific business focus of Fleet’s three pending acquisitions minimizes the risk that the integration of any of the three will be compromised due to lack of resources.

Ratings Reaffirmed:
Fleet Financial Group
Senior Debt A (Single-A)
Subordinated Debt A- (Single-A-Minus)
Preferred Stock BBB+ (Triple-B-Plus)
Commercial Paper D-1 (D-One)
Fleet National Bank
Long-Term Obligations A+ (Single-A-Plus)
Short-Term Obligations D-1 (D-One)
Fleet Bank, N.A.
Long-Term Obligations A+ (Single-A-Plus)
Short-Term Obligations D-1 (D-One)
Fleet Bank-New York
Long-Term Obligations A+ (Single-A-Plus)
Short-Term Obligations D-1 (D-One)
Fleet Bank of Maine
Long-Term Obligations A+ (Single-A-Plus)
Short-Term Obligations D-1 (D-One)
Fleet Capital Trust I
Preferred Stock BBB+ (Triple-B-Plus)
Fleet Capital Trust II
Preferred Stock BBB+ (Triple-B-Plus)
Ratings Placed on Rating Uncertain:Advanta Corp.
Senior Debt BBB- (Triple-B-Minus)
Preferred Stock BB (Double-B)
Advanta National Bank
Long-Term Obligations BBB (Triple-B)
Subordinated Notes BBB- (Triple-B-Minus)
Short-Term Obligations D-2 (D-Two)
Advanta Capital Trust I
Preferred Stock BB (Double-B)


S&P Rates New Advanta

Standard & Poor’s ratings of Advanta Corp. and its subsidiaries remain on CreditWatch; however, the implications are revised to negative from developing. Standard & Poor’s ratings on senior bank notes, subordinated notes, and CDs of Advanta National Bank and Advanta National Bank USA remain on CreditWatch with developing implications. (see list below)

In addition, Standard & Poor’s affirmed its ratings on Fleet Financial Group Inc. and related entities. These ratings are not on CreditWatch. The outlook remains positive.

Standard & Poor’s placement of Advanta Corp. on CreditWatch followed the announcement of a proposed transfer of its credit card business to a Fleet Financial Group subsidiary.

Without the credit card business, Advanta Corp. will be considerably smaller and less well-diversified. Its non-prime mortgage and small ticket leasing operations carry a relatively high risk profile that could result in a slightly lower rating than the current double-‘B’ rating for Advanta Corp. and double-‘B’-plus rating for the bank subsidiaries. Therefore, all ratings of Advanta Corp. and its subsidiaries’ counterparty ratings are revised to CreditWatch negative pending further discussions with management about the strategies for the remaining business lines.

Certain certificates of deposits and most debt issues of National Bank and Advanta National Bank USA are to be transferred to Fleet Bank, N.A., which is rated single-‘A’, but the final determination of which liabilities will be made at the time the transaction is consummated.

Standard & Poor’s will upgrade the liabilities assumed by Fleet Bank to Fleet’s rating. Other liabilities that remain with Advanta could be downgraded. Therefore, these liabilities remain on CreditWatch with developing implications.

The ratings of Fleet Financial Group Inc. (Fleet) and its affiliates are affirmed, as is their positive outlook. The agreement to acquire the credit card receivables from Advanta in a transaction accounted for as a purchase will increase the company’s goodwill and other intangibles by about $600 million. Nevertheless, financial risks are moderate and within Fleet’s capital capacity. While there is no question that the asset quality deterioration of the Advanta credit card portfolio has been significant over the past two years, overall indicators suggest that problems may have already or will soon peak. Fleet management is aware of the portfolio quality and has already begun considering the appropriate steps to manage credit quality to more acceptable levels.

The Advanta receivables transaction is the third of a series of recent acquisitions that Fleet has announced including asset manager Columbia Management and retail brokerage Quick & Reilly. While each acquisition is distinct in its business profile and in method of financing, the potential for problems in execution are similar and the combination of the three will challenge Fleet’s operational and managerial abilities. Successful combination with each will greatly enhance the value of the franchise and diversity of revenue mix.

Given the type of businesses being acquired, the method of financing and the degree of standalone infrastructure being acquired in these deals, Standard and Poor’s believes the level of business risk is acceptable and will continue to maintain its positive outlook.

Fleet Financial Group Inc. with about $84 billion of assets is among the largest bank holding companies in the country and the largest in New England. In addition to its regional retail and commercial franchise, Fleet has about $53 billion of assets under management, not including the Columbia acquisition, which would add an additional $22 billion. Fleet has focused on growing its regional banking operation and more recently on diversifying its national business product lines.

No rating action has been taken by Standard & Poor’s on Advanta’s triple-‘A’ rated Class A asset-backed certificates and single-A rated Class B asset-backed certificates. Given Fleet’s acquisition of substantially all of Advanta’s credit card operations, receivables, and personnel, Standard & Poor’s does not expect the transaction to adversely affect performance of the portfolio, Standard & Poor’s said. — CreditWatch

Advanta Corp.
Senior unsecured debt BB
Preferred stock B+
Long-term counterparty BB
Short-term counterparty B
Advanta National Bank USA
Advanta National Bank
Long term counterparty BB+
Short term counterparty B
Advanta Capital Trust I
Preferred stock B+

Advanta National Bank USA
Advanta National Bank
Senior Bank Notes BB+/B
Subordinated Bank Notes BB-/B

Fleet Financial Group Inc.
Long-term counterparty A-
Short-term counterparty A-2
Senior debt A-
Subordinated debt BBB+
Preferred stock BBB
Commercial paper A-2
Fleet Capital Trust II
Preferred stock BBB
Fleet National Bank, MA
Fleet Bank, Albany, NY
Fleet Bank of Maine, Portland
Fleet Bank N.A.
Fleet Bank-New Hampshire, Nashua
Long-term counterparty A
Short-term counterparty A-1
CDs A/A-1
Bank notes A/A-1
Subordinated bank notes A-
Fleet Mortgage Group Inc.
Long-term counterparty A
Senior debt A