MBNA Corp., the former credit-card subsidiary of MNC Financial Inc., received some welcome news yesterday as Standard & Poor's Corp. upgraded its rating on the certificates of deposit issued by MBNA's major banking unit.
S&P, citing a healthy customer base and strong earnings at MBNA America Bank N.A., raised the bank's rating to triple-B-plus from double-B on CDs of more than a year's duration. CDs of a year or less were upgraded to A-2 from single-B.
MBNA had been on S&P's CreditWatch with positive implications since Feb. 11, just weeks after the company was spun off in a public stock offering.
"The company has posted high levels of profitability over the last few years due to good credit performance and a strong market position," S&P's review said. "As a result of a relatively select customer base for its credit cards, asset quality levels have remained superior to that of industry peers."
MBNA Corp., based in Newark, Del., is the third-largest issuer of credit cards in the nation. The division of MNC that was spun off to become MBNA earned $129 million last year, compared with $104 million in 1989, according to its prospectus. Company spokesman Michael S. Schuck said primary capital was about $539 million, more than 10 percent of the company's assets.
MBNA stock, traded on the New York Stock Exchange, closed yesterday at $25.75 a share, up 75 cents.