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DBRS has assigned a provisional rating of BBB(high) to a new issue of BMO LRCNs:

DBRS Limited (DBRS Morningstar) assigned a provisional rating of BBB (high) with a Stable trend to Bank of Montreal’s (BMO or the Bank) NVCC Additional Tier 1 (AT1) Limited Recourse Capital Notes Series 1 (the Capital Notes). DBRS Morningstar assigned the rating equal to the Bank’s Intrinsic Assessment of AA (low) less four rating notches, which is consistent with DBRS Morningstar’s standard notching for capital instruments with contingent risks and its ratings for the Bank’s NVCC Preferred Shares. This is one notch below the rating of BMO’s NVCC Subordinated Debt.

DBRS Morningstar notes that the Office of the Superintendent of Financial Institutions granted Tier 1 capital treatment to the Capital Notes.

While S&P has them at BBB-:

S&P Global Ratings today said it assigned its ‘BBB-‘ issue-level rating to Bank of Montreal’s (BMO; A+/Stable/A-1) Canadian dollar-denominated Additional Tier I Structure Limited Recourse Capital Notes. Under this structure, a trust has been established where the bank is the sole beneficiary. Investors of the notes will have recourse only to the assets held by the trust. At the same time, S&P Global Ratings assigned its ‘BBB-‘ issue-level rating to the bank’s preferred shares, which will reside in the trust.

In accordance with our criteria for hybrid and other capital instruments, the rating reflects our analysis of the proposed instrument, and our assessment of BMO’s ‘a’ stand-alone credit profile (SACP).

I have not been able to find a press release announcing the new issue.

But Canadians sure are saving!

But the ones who may end up doing the most good for our economy are the people who added a stunning $127-billion to savings and chequing accounts and term deposits in the first half of the year.
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Investor Economics, which provided the $127-billion figure, says the average amount of money flowing into savings, chequing and GIC accounts averaged $32-billion for the first half of 2017, 2018 and 2019. Those flows were considered to be fairly high until the pandemic scared people into maximizing their savings. “This year’s number is beyond anything we have seen,” Mr. Cardone said.

Another take on this trend comes from Statistics Canada, which tracks our national savings rate and has its eye on the pile of cash accumulated this year. The percentage of after-tax income going into savings has jumped from just 2 per cent to 3 per cent prepandemic to 28.2 per cent from April through June.

This entry was posted on Tuesday, September 8th, 2020 at 6:58 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.