BMO: Preferred Technical Downgrade by S&P

Standard & Poor’s has announced:

  • Following a review of Bank of Montreal (BMO) under our revised bank criteria (published on Nov. 9, 2011), we are affirming our ‘A+/A-1’ issuer credit rating on BMO. The outlook is stable.
  • Our rating on BMO reflects our adequate scores for the bank’s business position, capital and earnings, and risk position, and average funding and adequate liquidity.
  • The issuer credit rating on BMO incorporates one notch of uplift, reflecting BMO’s high systemic importance in Canada and our assessment of the Canadian government as supportive.
  • We expect the bank to continue to generate consistent earnings, supported by its stable retail banking operations and to benefit from its higher proportion of commercial lending with better growth prospects and manageable loan losses.

As we previously announced, on Dec. 13, 2011, Standard & Poor’s Ratings Services affirmed its ‘A+/A-1’ issuer credit rating on Bank of Montreal (BMO). The stand-alone credit profile (SACP) is ‘a’. At the same time, we lowered our ratings on the bank and its subsidiaries’ hybrid securities and preferred stock to ‘BBB+’ from ‘A-‘, two notches below the SACP, consistent with application of our revised bank hybrid capital criteria (published Nov. 1, 2011). The outlook is stable.

As a result of this, the global scale rating is now BBB+; the preferred scale rating is P-2(high); for all issues.

BMO has the following preferred share issues outstanding: BMO.PR.H, BMO.PR.J, BMO.PR.K and BMO.PR.L (DeemedRetractible); and BMO.PR.M, BMO.PR.N, BMO.PR.O, BMO.PR.P and BMO.PR.Q (FixedReset).

One Response to “BMO: Preferred Technical Downgrade by S&P”

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