Fitch upgrades Wachovia on Wells Fargo acquisition

NEW YORK, Jan 2 (Reuters) - Fitch Ratings on Friday raised its rating on Wachovia Corporation, citing its acquisition by higher-rated Wells Fargo & Co (WFC.N), which assumed Wachovia's debt.

Fitch affirmed Wells Fargo's rating at "AA," the third-highest investment grade, and raised Wachovia's rating by two notches to "AA" from "A-plus" to align it with Wells Fargo's rating.

Wells Fargo finished buying Wachovia on Wednesday, more than doubling its size. It now has the nation's largest branch network, with more than 6,600 offices, and one of the largest deposit bases. For details click on [ID:nN01332120].

Wells Fargo has a good track record with integrating acquisitions, and its combination with Wachovia is expected to result in annual cost savings of about $5 billion, Fitch said in a statement.

"While Wells Fargo is certainly not immune from the macroeconomic pressures facing U.S. consumers and businesses, it has fared comparatively better than many banks," Fitch said. For example, Wells Fargo never attempted to compete with investment banks in structured finance and did not suffer the losses that have plagued that industry, Fitch said.

The cost of protecting Wells Fargo's debt with credit default swaps fell on Friday to about 115 basis points, or $115,000 a year to protect $10 million of debt, down about 4 basis points on the day, according to data from Markit Intraday. (Reporting by Dena Aubin, Editing by Walker Simon) (dena.aubin@thomsonreuters.com; +1-646-223-6325; Reuters Messaging: dena.aubin.reuters.com@reuters.net))