CWB.PR.A Rated by DBRS; Added to HIMIPref™ Database

DBRS has announced that it:

has today assigned two new ratings to Canadian Western Bank (CWB): a Short-Term Instruments rating of R-1 (low) and a Non-Cumulative Preferred Shares rating of Pfd-3 (high) for CWB’s Non-Cumulative Five-Year Rate Reset Preferred Shares, Series 3, issued in March 2009. These new ratings supplement CWB’s existing A (low) Issuer Rating, Deposits & Senior Debt rating of A (low) and Subordinated Debt rating of BBB (high), all of which were last confirmed on October 9, 2012. The trend on all ratings is Stable.

The Short-Term Instruments rating has been assigned based primarily on CWB’s existing ratings and DBRS’s Rating Policy “Short-Term and Long-Term Rating Relationships,” available at www.dbrs.com.

The Non-Cumulative Preferred Shares rating was also assessed based on CWB’s existing ratings, including an intrinsic rating of A (low), using DBRS Criteria: Rating Bank Preferred Shares and Equivalent Hybrids (June 29, 2009) (the Criteria). While the Criteria would normally imply a four-notch differential between the intrinsic assessment and the preferred share rating, CWB’s Pfd-3 (high) rating is the equivalent of a three-notch differential. DBRS notes that the better-than-base notching is warranted, given CWB’s long demonstrated ability and willingness to pay all dividends and the lack of any history of reducing common dividends.

CWB.PR.A is a FixedReset, 7.25%+500 that commenced trading 2009-3-2.

The issue has not been tracked by HIMIPref™ due to the lack of a rating; but now that it has one I have added it to the database on a backdated basis.

Assiduous Readers will remember that I do not track unrated issues, not because I worship the Credit Rating Agencies, but because it is very useful to have a third-party, public and influential company tell the Board of Directors that they’re doing it wrong during times of trouble.

The issue has been assigned to the Scraps index due to credit concerns.

It is quite interesting that CWB has now paid for a rating on their public preferred share issue. I’ll bet a nickel that there will be a new issue coming out from them next week – but, sadly, probably not at 7.25%+500!

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