Moody's Investors Service may cut its credit rating on Synovus Financial Corp. because of the bank's plan to spin off its stake in an electronic payments processor, the credit-rating agency said.
The Columbus, Ga.-based bank plans to spin off its 81 percent stake in TSYS to Synovus shareholders.
Moody's said it is concerned that by jettisoning a good source of profit, Synovus Financial may become more financially vulnerable.
Moody's said it is worried about Synovus' overexposure to real estate development and construction loans, which will become an even more concentrated portion of the company's portfolio after spinning off TSYS.
Chief Executive Richard E. Anthony said splitting the bank and the payments processor will allow each to flourish. TSYS is bound by certain restraints as a banking subsidiary, so spinning it off will remove those shackles. Meanwhile, Synovus will be able to focus exclusively on becoming the South's premier regional bank.
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(The Associated Press)
