DBRS Updates and Requests Comments on Preferred Share and Hybrid Criteria

DBRS updated its criteria titled “Preferred Share and Hybrid Security Criteria for Corporate Issuers” (the Criteria) and is requesting comments on this Criteria so that it may be used by analysts located in Europe (the criteria is already available for use by analysts located in North America). This update supersedes the version of the Criteria that was previously updated and published in December 2017.

While certain details have been clarified in this Criteria, DBRS deems the changes not to be material and has determined that no ratings are or will be changed as a result of this update. These changes include a revision in the cap for the equity treatment of Preferreds & Hybrids from 20% of common equity to 10% of total capital. Besides moderating the higher volatility generally experienced in the book value of common equity relative to total capital, the change better reflects the positioning of hybrids as part of the capital structure (rather than just the equity component), as this is the basis on which an issuer finances its activities.

Other small editorial changes have also been made to improve clarity.

Comments should be received on or before December 1, 2018. Please submit your comments to the following e-mail address: Corporate_Finance_Comments@dbrs.com.

DBRS publishes on its website all comments received except in cases where confidentiality is requested by the respondent.

Notes:
DBRS criteria and methodologies are publicly available on its website www.dbrs.com under Methodologies.

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