DBRS Assigns Ratings to Hollis Canadian Bank of AA and R-1 (high), Negative Trend

DBRS Limited (DBRS) has today assigned ratings to Hollis Canadian Bank (Hollis), a wholly owned, Office of the Superintendent of Financial Institutions-regulated subsidiary of Bank of Nova Scotia (BNS; rated AA with a Negative trend by DBRS). Hollis has been assigned a Deposits & Senior Debt rating of AA and Short-Term Instruments rating of R-1 (high), both with Negative trends. The ratings and trends have been equated to the ratings of Bank of Nova Scotia based on an SA1 support assessment, which indicates DBRS’s view that BNS would provide timely support to this deposit-taking banking subsidiary.

The Negative trend reflects DBRS’s view that anticipated changes in Canadian legislation and regulation mean that the potential for timely support for systemically important institutions is declining and is likely to eventually result in a change in DBRS’s support assessment for BNS to SA3 from SA2. At the same time, DBRS notes that an additional layer of protection for non-bail-in-able debt and deposits may eventually be provided by bail-in-able senior debt under the anticipated bail-in debt regime.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

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

The applicable methodologies are Global Methodology for Rating Banks and Banking Organisations (June 2015), Rating Bank Capital Securities - Subordinated, Hybrid, Preferred & Contingent Capital
Securities (February 2015) and DBRS Criteria: Support Assessment for Banks and Banking Organisations (March 2015), which can be found on our website at www.dbrs.com.