PrefBlog

Standard & Poor’s has announced:

• •We believe that the Canadian banking sector is encountering incremental pressure from headwinds facing the Canadian economy, which is heightening economic risk in the banking system.
• •We also believe that industry risk for the Canadian banking sector is increasing. We expect that intensifying competition for loans and deposits will lead to pressure on profitability growth, especially in banks’ retail businesses.
• •We are affirming our ‘AA-/A-1+’ long- and short-term issuer credit ratings on Toronto-Dominion Bank (TD Bank), and revising the outlook to stable from negative.
• •The stable outlook reflects our expectation that TD Bank will maintain its current credit profile in the next 24 months.

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The ratings are also based on our assessment of TD Bank’s funding as “average” (revised from “above average”) and of its liquidity position as “adequate”. The revision of our assessment of TD Bank’s funding profile recognizes its favorable deposit position, particularly in the U.S., counterbalanced by notable reliance on wholesale funding, as is the case with other large Canadian banks. The resulting SACP of ‘a+’ is adjusted upward one notch in arriving at the ‘AA-‘ issuer credit rating, reflecting our expectation for potential extraordinary government support in a stress scenario.
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The stable outlook reflects Standard & Poor’s view that TD Bank’s core retail-oriented franchise spanning both Canadian and U.S. markets incorporates sufficient resilience to weather a range of economic environments, even recognizing the potential for more drawn-out recoveries in both markets.

S&P’s prior negative outlook was reported on PrefBlog.

TD has the following preferred share issues outstanding: TD.PR.A (Series AA); TD.PR.C (Series AC); TD.PR.E (Series AE); TD.PR.G (Series AG); TD.PR.I (Series AI); TD.PR.K (Series AK); TD.PR.O (Series O); TD.PR.P (Series P); TD.PR.Q (Series Q); TD.PR.R (Series R); TD.PR.S (Series S) and TD.PR.Y (Series Y).

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