Cocos: how agencies will approach hybrids

Author: Gemma Varriale | Published: 30 Nov 2011

Rating hybrids in an environment characterised by regulatory uncertainty is giving agencies plenty to think about.

James Longsdon, co-head EMEA financial institutions at Fitch rating, which published an exposure draft on rating bank hybrid securities in the summer, said that the agency tried to assess the risks of missing a coupon, deferring a coupon, or writing down a distressed debt exchange - permanently or temporarily.
"Where we think we can objectively measure non-performance risk we assign ratins. If we don't think we can, then to...