DBRS Discontinues Rating KeyCorp’s Non-Cumulative Perpetual Convertible Preferred Stock

DBRS, Inc. (DBRS) has discontinued and withdrawn the rating of Keycorp’s (KeyCorp or the Company) Non-Cumulative Perpetual Convertible Preferred Stock. Effective June 15, 2013, the Series A Preferred Stock, subject to certain conditions (generally linked to its share price), may be converted into common stock at the option of the Company.

This action follows the application of DBRS’s updated “Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities,” which was released earlier today.

In the updated Criteria, DBRS may choose not to rate an instrument when there is high uncertainty because the trigger for conversion into common equity lacks the certainty required by DBRS criteria standards. Although DBRS believes conversion of the Series A is not likely, the lack of trigger control has led DBRS to conclude the instrument cannot be rated under the updated Criteria.

This action does not reflect any change in DBRS’s view of KeyCorp’s credit profile and is not related to any issuer specific credit events. KeyCorp’s other ratings, including its Issuer & Senior Debt rating of BBB (high) with a Stable trend, are unaffected by today’s action.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organizations. Other methodologies used include the DBRS Criteria – Intrinsic and Support Assessments, and DBRS Criteria: Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities. These can be found on the DBRS website under Methodologies.

The sources of information used for this rating include company documents, the Federal Reserve, the Federal Deposit Insurance Corporation and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

The rating is endorsed by DBRS Ratings Limited for use in the European Union.

Lead Analyst: Mark Nolan
Rating Committee Chair: Kent Wideman
Initial Rating Date: 27 July 2005
Most Recent Rating Update: 23 August 2013

For additional information on this rating, please refer to the linking document under Related Research.