Rating agencies are beginning to remove systemic and
regional support from the way they assess hybrid securities and
subordinated debt. Alongside wider notching, this means likely
During an IFLR and Morrison & Foerster web seminar last
month, a representative from Moody's Investors Services
explained the agency's revised methodology.
"In many cases we will be removing systemic and regional
support," said Barbara Havlicek, senior vice president in the
Hybrid Capital Group at Moody's. "We thought that systemic
support would extend to hybrid rating through the crisis. This
has not necessarily happened."
As a result, Moody's has placed 775 hybrid and subordinated
debt securities on review for a possible downgrade. There are
also 460 medium-term note and shelf registration programmes on
Wider notching This translates...