DBRS Morningstar Finalizes Provisional Rating on Fédération des caisses Desjardins du Québec’s Non-Viability Contingent Capital Subordinated Debt at A (low), Stable

DBRS Limited (DBRS Morningstar) finalized its provisional rating of A (low) with a Stable trend on Fédération des caisses Desjardins du Québec’s (rated AA with a Stable trend by DBRS Morningstar) Non-Viability Contingent Capital (NVCC) Subordinated Debt.

Following the review of associated documentation, DBRS Morningstar has confirmed that the terms of the issuance are consistent with those reviewed at the time the provisional rating was assigned on January 24, 2020. For further details on the provisional rating, please see the DBRS Morningstar press release entitled “DBRS Morningstar Assigns Provisional Rating of A (low), Stable, to Fédération des caisses Desjardins du Québec’s NVCC Subordinated Debt.”

The aggregate gross proceeds from the NVCC Subordinated Debt is expected to total $1 billion. Proceeds from the issuance will be used for general business purposes and is eligible to count as Tier 2 capital.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework and its methodologies can be found at: https://www.dbrsmorningstar.com/research/357792.

DBRS Morningstar notes that the above press release was amended on June 18, 2020, to incorporate links to the methodologies. The amendment was minor and would not impact the understanding of the reader.

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

The principal methodologies are the Global Methodology for Rating Banks and Banking Organisations (June 11, 2019: https://www.dbrsmorningstar.com/research/362170/global-methodology-for-rating-banks-and-banking-organisations) and Global Methodology for Rating Life and P&C Insurance Companies and Insurance Organizations (September 16, 2019; https://www.dbrsmorningstar.com/research/350346/global-methodology-for-rating-life-and-pc-insurance-companies-and-insurance-organizations).

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found on the issuer page at www.dbrsmorningstar.com.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

This rating is endorsed by DBRS Ratings Limited (DBRS Morningstar) for use in the European Union. The following additional regulatory disclosures apply to endorsed ratings:

The Global Methodology for Rating Banks and Banking Organisations (June 11, 2019) was applied to determine the rating of the banking operations of Desjardins Group (rated AA with a Stable trend by DBRS Morningstar). The Global Methodology for Rating Life and P&C Insurance Companies and Insurance Organizations (September 16, 2019) was applied to determine the rating of the Life and P&C insurance operations of Desjardins Group.

The last rating action on this issuer took place on January 24, 2020, when DBRS Morningstar assigned a provisional rating to the issuer’s NVCC Subordinated Debt.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar’s outlooks and ratings are monitored.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml.

Lead Analyst: Sohail Ahmer, Vice President, Global Financial Institutions Group
Rating Committee Chair: Roger Lister, Managing Director, Chief Credit Officer, Global Financial Institutions Group and Sovereign Ratings
Initial Rating Date: December 16, 2016

For more information on this credit or on this industry, visit www.dbrsmorningstar.com.

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