National City Likely on the Market.

Cleveland -- National City Corp. here is exploring "strategic alternatives," a term which has become a corporate euphemism for the company is up for sale. In its statement, NCC said it would make no further statements until its board has approved a specific course of action.

It has hired Goldman Sachs as the advisor for the review. "The review has no impact on National City's day-to-day operations. We remain focused on providing our customers with the high-quality products and personal service that have long differentiated us in the marketplace," said chairman, president and chief executive Peter E. Raskind.

Based on this announcement, both Morgan Stanley and Bear Stearns have upgraded NCC.

"We are upgrading NCC to equal weight on valuation and reduced risk given increased prospects the company will be acquired. We recommend closing out short positions, and reiterate our $10 price target," said Morgan Stanley analysts Betsy Graseck and Justin Kwong.

The analysts value NCC as an acquisition candidate at $12 per share. "In the event that NCC were to remain independent, we would expect the bank to cut its dividend to zero for the rest of 2008 and for 2009, as it looks to preserve its capital ratios in the face of the recessionary environment and rising borrowing costs."

Even though at the end of 2006, NCC sold the First Franklin subprime originations and servicing platforms to Merrill Lynch, the company has still suffered in the current credit crisis.

NCC operates more than 410 retail mortgage banking offices nationwide in addition to its retail bank branches, its filing said.