BofA Securities Rated 'A+/A-1'; Merrill Lynch, Pierce, Fenner & Smith 'A+/A-1' Ratings Affirmed; Outlooks Are Stable

  • Bank of America Corp. (BAC) is separating its U.S. broker-dealer--Merrill Lynch, Pierce, Fenner & Smith (MLPFS)--into two separate broker-dealers, per its Resolution Plan.
  • A new broker-dealer subsidiary--BofA Securities Inc. (BofAS)--will serve institutional clients upon separation (expected in the second quarter), while MLPFS will continue serving retail clients.
  • We are assigning our 'A+/A-1' issuer credit ratings to BofAS and affirming our 'A+/A-1' issuer credit ratings on MLPFS, based on our view of these subsidiaries' core group importance to BAC.
  • The stable outlook on both subsidiaries reflects our expectation that each will remain core to BAC's operations in most foreseeable circumstances and that any positive or negative rating action would depend on changes to BAC's 'a+' supported group credit profile.
NEW YORK (S&P Global Ratings) Feb. 1, 2019--, S&P Global Ratings today 
assigned 'A+/A-1' issuer credit ratings to BofA Securities Inc. (BofAS) and 
affirmed its issuer credit ratings on Merrill Lynch, Pierce, Fenner & Smith 
(MLPFS) at 'A+/A-1'. The outlook on both entities is stable.

The ratings on BofAS reflect its position as a core subsidiary that will serve 
Bank of America Corp.'s (BAC) U.S. institutional broker-dealer clients, after 
the separation. Likewise, our affirmation of our ratings on MLPFS reflect its 
continued core importance serving BAC's retail clients. BAC views both 
subsidiaries as material entities from a resolution perspective, which further 
highlights their strategic importance to the company. Lastly, we assume that 
these subsidiaries would likely benefit from the bail-in of additional loss 
absorbing capacity instruments issued by the parent, similar to BAC's other 
core subsidiaries.  

BAC committed to separate its U.S. broker-dealer--MLPFS--into two separate 
U.S. registered broker-dealers as part of its Resolution and Recovery Plan. 
Today, MLPFS holds the U.S. broker-dealer operations of BAC's Global Banking 
and Global Markets business (which serves institutions) and retail 
broker-dealer operations of its consumer banking (Merrill Edge) and Global 
Wealth and Investment Management businesses (which serve retail clients). 

The stable outlook on BofAS and MLPFS reflects the stable outlook on their 
ultimate parent, BAC. We expect that both subsidiaries will remain core to 
BAC's operations in most foreseeable circumstances, and that any positive or 
negative rating action will depend on changes to BAC's 'a+' supported group 
credit profile (see "Bank of America Corp.," published on Sept. 7. 2018). 
Frequently Asked Questions Q:What is the credit rating id for this company?
Q:What is the credit rating date for this company?
A:Friday, February 1, 2019
Q:What is the AI credit rating?
A:AI credit rating is an evaluation of the credit risk of a prospective debtor, predicting their ability to pay back the debt, and an implicit machine learning forecast of the likelihood of the debtor defaulting.
Q:What is the AI credit rating scale?
A:AI rating scale, which ranges from a maximum Aaa to a minimum C, consists of 21 notches and two categories: Investment category for the financially sound companies and Speculative category for the companies with a higher risk of defaulting.
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