DBRS Morningstar Publishes Updated Preferred Share and Hybrid Security Criteria

DBRS Morningstar Credit Ratings (DBRS Morningstar) published an updated version of “DBRS Morningstar Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers” (the Criteria).

DBRS Morningstar has conducted a periodic review of the Criteria. This update supersedes the previous version published on November 1, 2018, and is effective as of the date of this press release. DBRS Morningstar deems the update not to be material and has determined that no ratings are expected to change as a result of this update.

Among other clarifications, DBRS Morningstar has expanded the exception to the 10% of capital rule discussed on page four of the Criteria for purely internal arrangements where the intention of the deeply subordinated debt or preferred shares is clearly to mirror the attributes of equity. Deeply subordinated debt or preferred shares that are clearly intended to be equity (for example, an instrument that permits no distributions whatsoever until all senior debt is repaid in full) and are held by external parties may now also be granted an exception to the 10% of capital rule on a case by case basis.

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