{"id":17314,"date":"2011-12-14T01:48:33","date_gmt":"2011-12-14T05:48:33","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=17314"},"modified":"2011-12-14T01:48:33","modified_gmt":"2011-12-14T05:48:33","slug":"ry-preferred-technical-downgrade-on-global-scale-by-sp","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=17314","title":{"rendered":"RY: Preferred Technical Downgrade on Global Scale by S&amp;P"},"content":{"rendered":"<p>Standard &#038; Poor&#8217;s <a href=\"http:\/\/www.standardandpoors.com\/ratings\/articles\/en\/us\/?articleType=HTML&#038;assetID=1245325792777\">has announced<\/a>:<\/p>\n<blockquote>\n<ul>\n<li>Following a review of Royal Bank of Canada (RBC) under Standard &#038; Poor&#8217;s revised bank criteria (published Nov. 9, 2011), we are affirming the &#8216;AA-\/A-1+&#8217; issuer credit ratings on the bank. The outlook is stable.\n<li>Our ratings on RBC are based on its strong business position, moderate capital and earnings, strong risk position, and average funding and adequate liquidity, as our criteria define these terms.\n<li>The issuer credit rating on RBC receives one notch of uplift, reflecting RBC&#8217;s high systemic importance in Canada and our assessment of the Canadian government as supportive.\n<li>We expect the bank to continue to generate consistent earnings supported<br \/>\nby its premier business franchises in Canada with its stable retail banking operations and manageable loan losses.<\/ul>\n<p>As we previously announced, on Dec. 13, 2011, Standard &#038; Poor&#8217;s Ratings Services affirmed its &#8216;AA-\/A-1+&#8217; issuer credit ratings on Royal Bank of Canada (RBC). The stand-alone credit profile (SACP) is &#8216;a+&#8217;. The outlook is stable. At the same time, we lowered the ratings on the bank and its subsidiaries&#8217; hybrid securities and preferred stock to &#8216;A-&#8216; from &#8216;A&#8217;, two notches below the SACP, consistent with application of our revised bank hybrid capital criteria (published Nov. 1, 2011).<\/p>\n<p>We also lowered our ratings on RBC and its subsidiaries&#8217; nondeferrable subordinated debt to &#8216;A&#8217; from &#8216;A+&#8217;. RBC&#8217;s nondeferrable subordinated debt is rated off the &#8216;a+&#8217; SACP as opposed to being notched from the &#8216;AA-&#8216; issuer credit rating, based on our new hybrid criteria. We stipulate that nondeferrable subordinated debt would be rated below a bank&#8217;s SACP in countries whose legal or regulatory frameworks may not support this type of debt in a stress scenario. Recent guidance from the Office of the Superintendent of Financial Institutions (OSFI) expresses an expectation that, after a transition period, all Tier 1 and 2 capital instruments &#8220;must be able to absorb losses in a failed financial institution&#8221;. Standard &#038; Poor&#8217;s expects differentiated treatment would apply to capital instruments and senior debt as a Canadian bank approaches a state of nonviability.<\/p><\/blockquote>\n<p>The issues remain at P-1(low) on the Preferred Scale.<\/p>\n<p>RY has the following preferred shares outstanding: RY.PR.A, RY.PR.B, RY.PR.C, RY.PR.D, RY.PR.E, RY.PR.F, RY.PR.G and RY.PR.H (DeemedRetractible); RY.PR.I, RY.PR.L, RY.PR.N, RY.PR.P, RY.PR.R RY,PR.T, RY.PR.X and RY.PR.Y (FixedReset); and RY.PR.W (PerpetualDiscount)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Standard &#038; Poor&#8217;s has announced: Following a review of Royal Bank of Canada (RBC) under Standard &#038; Poor&#8217;s revised bank criteria (published Nov. 9, 2011), we are affirming the &#8216;AA-\/A-1+&#8217; issuer credit ratings on the &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-17314","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/17314","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17314"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/17314\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}