Standard & Poor’s Ratings Services has placed its ratings on Brascan Financial Corp. on CreditWatch with positive implications on news that it’s being amalgamated with parent company Brascan Corp.

Under the amalgamation, Brascan Financial will cease to exist and all rated securities of Brascan Financial will become obligations of Brascan and will be equalized with Brascan’s higher rating.

“The announcement is the first step in a series of transactions that will take place to simplify Brascan’s operations and corporate structure, and reduce its administrative costs,” said Standard & Poor’s credit analyst Daniel Koelsch.

Brascan will assume all of the assets and liabilities of Brascan Financial. Brascan Financial’s existing public debt will become a direct obligation of Brascan. The planned transaction includes the exchange of Brascan Financial’s preferred shares for Brascan’s preferred shares, and is subject to shareholder approval. The amalgamation is expected to be completed by Dec. 31.

The amalgamation will modestly increase the amount of debt directly held by Brascan, S&P notes. “Still, debt at Brascan as a ratio to its estimated portfolio value is expected to remain within the 20%-25% range that Standard & Poor’s views appropriate for the rating under its operating holding company methodology,” it says.