DBRS Places Ratings of City National Corporation Under Review With Positive Implications

DBRS, Inc. (DBRS) has today placed most ratings of City National Corporation (City National or the Company) and its operating bank subsidiary, City National Bank, Under Review with Positive Implications, including City National’s Issuer & Senior Debt rating of ‘A’. Concurrently, the Bank’s Short-Term Instruments rating was confirmed at R-1 (middle) with a Stable trend. The ratings action follows the announcement that City National has agreed to be acquired by Royal Bank of Canada (RBC – rated AA with a Stable trend) in a stock and cash transaction valued at approximately $5.4 billion, based on RBC’s closing stock price on January 21, 2015. The transaction is expected to close in 4Q15, subject to customary conditions, including regulatory and City National shareholder approvals.

The Under Review with Positive Implications status reflects DBRS’s view that City National should benefit from RBC’s additional resources, capabilities, and financial strength. DBRS expects to conclude the review upon the close of transaction. Upon close, DBRS would likely designate City National as a SA1 (DBRS’s highest level of support factoring in RBC’s ownership) and rate the Company at AA (low), one notch below RBC’s current Issuer Rating of AA with a Stable trend.

City National Corporation, a bank holding company headquartered in Los Angeles, California, reported $32.6 billion in assets at December 31, 2014.

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

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations (June 2014). Other applicable methodologies include the DBRS Criteria – Support Assessments for Banks and Banking Organisations (January 2014) and DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities (December 2013). These can be found at: http://www.dbrs.com/about/methodologies.

The primary sources of information used for this rating include company documents and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

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

Lead Analyst: Michael Driscoll
Rating Committee Chair: Roger Lister
Initial Rating Date: 6 April 2005
Most Recent Rating Update: 31 July 2014

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