DBRS Morningstar Assigns Provisional Rating of A (low), Stable, to Fédération des caisses Desjardins du Québec’s NVCC Subordinated Debt

DBRS Limited (DBRS Morningstar) assigned a provisional rating of A (low) with a Stable trend to Fédération des caisses Desjardins du Québec’s (FCDQ; rated AA with a Stable trend by DBRS Morningstar) NVCC Subordinated Debt.

DBRS Morningstar assigned the NVCC Subordinated Debt a rating equal to that of FCDQ’s Intrinsic Assessment, less three rating notches, as the NVCC Subordinated Debt has only an Autorité des marchés financiers–compliant NVCC trigger, which is consistent with the Autorité des marchés financiers’ requirements for NVCC instruments, and no additional triggers.

The notching differential reflects the likelihood of losses being imposed on non-viability contingent capital subordinated instruments prior to losses on subordinated debt or senior debt and is consistent with DBRS Morningstar’s “Global Methodology for Rating Banks and Banking Organisations” (June 2019).

Notes:
The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (June 2019), which can be found on our website under Methodologies & Criteria.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found on the issuer page at www.dbrs.com

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

This rating is endorsed by DBRS Ratings Limited for use in the European Union. The following additional regulatory disclosures apply to endorsed ratings:

This is the first DBRS Morningstar rating on this financial instrument.

The last rating action on this issuer took place on July 19, 2019, when DBRS Morningstar confirmed the ratings of FCDQ.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (“ESMA”) in a central repository, see: http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml.

Lead Analyst: Sohail Ahmer, Vice President, Global Financial Institutions Group
Rating Committee Chair: Roger Lister, Managing Director, Chief Credit Officer, Global Financial Institutions Group and Sovereign Ratings
Initial Rating Date: December 16, 2016

For more information on this credit or on this industry, visit www.dbrs.com.

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