PrefBlog

Moody’s Investors Service has announced that it:

has today placed on review for upgrade all long-term ratings and assessments of Royal Bank of Canada (RBC), including the a3 standalone baseline credit assessment (BCA), the Aa2 deposit rating and Counterparty Risk Rating, and the Aa2(cr) Counterparty Risk Assessments. The bank’s Prime-1 short term ratings and Prime-1(cr) short-term Counterparty Risk Assessment were affirmed.
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RBC’s strong credit profile reflects its position as a diversified universal bank with leading market shares across many retail products and services in its home market and a growing presence in the US through its California-based private and commercial bank, City National Bank (LT deposits Aa3 stable, BCA a2), which RBC acquired in 2015. RBC’s diversified business mix, which also includes a major commitment to capital markets, and wealth and asset management businesses, has extended the bank’s competitive advantage over many of its peers. This business mix has also produced a sturdy buffer against the greater volatility of RBC’s capital markets activity through various economic cycles. The steady profitability generated by RBC’s businesses enables the bank to consistently reinvest to drive organic business growth as well as develop leading digital customer solutions and capabilities, further supporting its strong competitive position.
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RBC’s a3 BCA could be upgraded if Moody’s assesses that the bank will likely continue to demonstrate a resilient operating performance that reflects a superior diversity of business mix relative to many similarly rated global peers, and stability in its risk profile , while maintaining its capital level above 12% tangible common equity as a percentage of risk-weighted assets. A higher BCA would likely lead to a ratings upgrade. The ratings could be confirmed at their existing level should the bank’s earnings and capital base not demonstrate the level of resilience expected by Moody’s when stressed under various scenarios.

The review for upgrade indicates that rating downgrades are unlikely over the next 12-18 months. However, RBC’s a3 BCA could be downgraded if the bank increases risk appetite leading to credit quality deterioration or the bank increased the size of its capital markets operations relative to its retail and commercial banking businesses. A significant further deterioration in the domestic operating environment or any material regulatory, compliance or risk management failures could also lead to a downgrade of the bank’s BCA. A lower BCA would likely lead to a ratings downgrade.

Affected issues are: RY.PR.H, RY.PR.J, RY.PR.M, RY.PR.N, RY.PR.O, RY.PR.P, RY.PR.S and RY.PR.Z .

Great-West Lifeco Inc. has announced:

the closing of its previously announced offering of 8,000,000 4.50% Non-Cumulative First Preferred Shares, Series Y (the “Series Y Preferred Shares”) for gross proceeds of $200 million. The offering was completed through a syndicate of underwriters led by BMO Capital Markets, RBC Capital Markets, Scotiabank, CIBC Capital Markets and TD Securities. The Series Y Preferred Shares will be listed for trading on the Toronto Stock Exchange under the symbol “GWO.PR.Y”.

Vital statistics are:

The issue traded 884,860 shares today in a range of 24.95-45 before closing at 24.98-99.

GWO.PR.Y is a Straight Perpetual, 4.50%, announced 2021-10-1. It is tracked by HIMIPref™ and has been assigned to the Insurance-Straight subindex.

Power Corporation of Canada and Power Financial Corporation have announced:

Upon completion of the offering, Power Financial intends to redeem all of its outstanding $200 million First Preferred Shares, Series I.

The offering in the quoted paragraph refers to a today’s announcement of a new issue of 4.50% Straight Perpetuals.

PWF.PR.I is a Straight Perpetual, 6.00%, that commenced trading 2003-3-11. It has been tracked by HIMIPref™ and is assigned to the PerpetualPremium subindex.

Update, 2021-11-13: On October 18, the company announced:

that it intends to redeem all 8,000,000 of its outstanding 6.00% Non-Cumulative First Preferred Shares, Series I (the “Series I Shares”) on November 22, 2021.

In accordance with the terms of the Series I Shares, the redemption price will be $25.00 per Series I Share (for a total of $200 million) together with any declared and unpaid dividends, net of any tax required to be withheld by the Corporation. A notice of the redemption of the Series I Shares will be provided in accordance with the rights, privileges and conditions attached to the Series I Shares.