DBRS Limited (DBRS Morningstar) assigned a provisional rating of BBB (high) with a Stable trend to iA Financial Corporation Inc.’s (iA or the Company) Limited Recourse Capital Notes Series 2022-1 and a provisional rating of Pfd-2 with a Stable trend to the Company’s Non-Cumulative Preferred Shares Series A.
KEY RATING CONSIDERATIONS
Per DBRS Morningstar’ Global Methodology for Rating Insurance Companies and Insurance Organizations, hybrid capital instruments that convert to preferred shares issued by an insurance holding company are rated two notches below its Issuer Rating.
DBRS Morningstar views iA’s ratings as well placed within its current rating category. Over the longer term, a ratings upgrade would occur from a sustained increase in market share in key product lines in combination with a more prudent risk profile or a larger capital buffer. Conversely, a substantial decline in capital levels or sustained weaker profitability would result in a ratings downgrade.
ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/ Social/ Governance factor(s) that had a significant or relevant effect on the credit analysis.
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings.
The Grid Summary Grades for iA Financial Corporation Inc. are as follows: Franchise Strength – Strong/Good; Risk Profile – Strong/Good; Earnings Ability – Strong/Good; Liquidity – Strong; Capitalization – Strong/Good.
All figures are in Canadian dollars unless otherwise noted.
The principal methodology is the Global Methodology for Rating Insurance Companies and Insurance Organizations (July 16, 2021; https://www.dbrsmorningstar.com/research/381667/). Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (May 17, 2022; https://www.dbrsmorningstar.com/research/396929/).
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.
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 under regular surveillance.
For more information on this credit or on this industry, visit www.dbrsmorningstar.com.
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