Fitch Assigns Final 'AAA' Rating to NBC's Inaugural Legislative Mortgage Covered Bonds
Here you can find all the latest breaking forex and currency news about Fitch Assigns Final 'AAA' Rating to NBC's Inaugural Legislative Mortgage Covered Bonds including currency analysis and forecasts, live foreign exchange rates, central bank interest rates, and currency trading strategies from experienced fx traders and forex platforms.
(The following statement was released by the rating agency)
NEW YORK, December 17 (Fitch) Fitch Ratings has assigned a final 'AAA' rating
with a Stable Outlook to National Bank of Canada's (NBC, 'A+'/F1', Stable
Outlook) inaugural series of registered covered bonds issued under its newly
established legislative program. The series CBL1 bonds have a par value of EUR
1 billion and a five-year maturity with a 12-month extension.
KEY RATING DRIVERS
The rating of NBC's mortgage covered bonds is based on the issuer's Long-term
Issuer Default Rating (IDR) of 'A+', Fitch Discontinuity-Cap (D-Cap) of 3
(moderate high risk), and the program's contractual asset percentage (AP) which
is expected to be in line with Fitch's 'AAA' breakeven AP of 91.7%.
The program D-Cap is driven by Fitch's moderate high risk assessment of the
systemic alternative management component of its discontinuity analysis which is
the result of the significant roles performed post issuer default by the
guarantor, or third parties acting on its behalf. The guarantor would likely
seek bondholder approval for major decisions and need to contract other parties
to perform important functions. This assessment is consistent across all
Canadian mortgage covered bond programs. All other D-Cap components have been
assessed as moderate risk.
The inaugural covered bonds are secured by a cover pool drawn from an initial
indicative portfolio consisting of 35,271 uninsured Canadian residential
mortgages totaling approximately CAD5.5 billion. The portfolio had a weighted
average (WA) original combined loan-to-value (LTV) of 73.1%, a non-zero WA
credit score of 734, and was roughly 17 months seasoned, with a large percentage
of loans concentrated in Quebec (61%) as of June 2013. Fitch's 'AAA' breakeven
AP of 91.7% is driven by a WA probability of default of 22.6% and a WA recovery
rate of 57.9% on the cover pool in an 'AAA' scenario. The assets have a WA
residual maturity of approximately 2.6 years while the first series of covered
bonds have a WA residual maturity of five years.
RATING SENSITIVITIES
NBC's covered bonds' rating would be vulnerable to a downgrade if any of the
following occurred: (i) the IDR was downgraded by two notches to 'A-'; (ii) the
D-Cap fell by two categories to 1 (very high risk); or (iii) the program's
contractual AP that Fitch takes into account in its analysis exceeded 91.7%.
Fitch's breakeven AP for a given covered bond's ratings will be affected by,
among others, the profile of the cover assets relative to outstanding covered
bonds, which can change over time, even in the absence of new issuances.
Therefore it cannot be assumed to remain stable over time.
Contact:
Primary Analyst
Vanessa Purwin
Senior Director
+1-212-908-0269
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
Secondary Analyst
Roger Lin
Associate Director
+1-212-908-0778
Committee Chairperson
Rui Pereira
Managing Director
+1-212-908-0766
Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549, Email:
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Covered Bonds Rating Criteria' (Sept. 4, 2013);
--'Counterparty Criteria for Structured Finance and Covered Bonds ' (May 13,
2013);
--'Counterparty Criteria for Structured Finance and Covered Bonds: Derivative
Addendum' (May 13, 2013);
--'Covered Bond Rating Criteria - Mortgage Liquidity and Refinance Stress
Addendum' (June 3, 2013);
--'Canadian Residential Mortgage Loan Loss Model Criteria' (May 15, 2013).
Applicable Criteria and Related Research:
Canadian Residential Mortgage Loan Loss Model
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708242
Covered Bonds Rating Criteria - Mortgage Liquidity and Refinance Stress Addendum
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709665
Counterparty Criteria for Structured Finance and Covered Bonds: Derivative
Addendum
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707156
Counterparty Criteria for Structured Finance and Covered Bonds
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=707155
Covered Bonds Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=717321
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=812103
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE
AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF
CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE
SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS
SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED
ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH
WEBSITE.
COPYRIGHT
Copyright Thomson Reuters 2013. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The article above is about breaking forex and currency news regarding Fitch Assigns Final 'AAA' Rating to NBC's Inaugural Legislative Mortgage Covered Bonds, if you have any question about it. Please contact us by using the link below. Thanks for your patience.
- Japanese Yen Gains, Nikkei Falls as BOJ Leaves Policy Unchanged
- Chinese Business Sentiment Contracts for the First Time in 4 Months
- Dismal UK Retail Sales to Spur Another Test of GBP/USD Resilience
- Forex-Webinar:-FOMC-Minutes-Reinforce-Hike-Forecast
- Trading Video: Dollar Fails to Rally on Hawkish FOMC, Equities Rally
- Among Top Themes, Where is the Risk Most Potent: Fed Hike, China, EM?
- EUR/USD Technical Analysis: Looking to Short on Bounce
- US Dollar Declines as FOMC Minutes Bring Nothing New to the Table
- US DOLLAR Technical Analysis: USD Holds Support on FOMC Minutes
- WTI Crude Oil Price Forecast: What Now That $40bbl Broke?
- Fingertrp Scalping with James Stanley (Using Tradingview Charts)
- EUR/USD Risks Fresh Monthly Lows on Hawkish FOMC Minutes
- Analyst Pick - Kiwi & CAD in Focus
- Price & Time: USD/CAD ? It?s Showtime
- GBP/USD Ranges Ahead of FOMC Minutes
- President Xi Warns That China Faces Considerable Downward Pressure
- FOMC Minutes Later Today - USD Set for October 28 Redux
- Silver Price Is Targeting Its Yearly Low
- FTSE 100: Commodity Markets Wants to See The FTSE 100 at 6040
- DAX 30: Momentum Slows Down, FOMC Minutes on Tap
- US Dollar May Extend Gains as Fed Minutes Foreshadow Rate Hike
- Copper Surplus Faces Falling Premiums; Gold Slides before Fed Minutes
- China Real Estate Market Recovery Slows in October
- Traders Not as Confident of Fed Hike as Markets, Economists
- EUR/GBP Technical Analysis: Euro Drops to 3-Month Low
- Dollar Unmoved After China Treasury Holdings Hit a 7 Month Low
- Can Dollar Climb Continue After FOMC Forecast Shift?
- Dollar’s CPI Rally Lacking, Stall in Risk Raises Yen Crosses Appeal
- NZD/USD Technical Analysis: Short Trade Activated Sub-0.65
- Will the DAX Crack or Cower from Resistance?