DBRS changes Home Trust view to negative

DBRS said it confirmed Home Trust Co.’s issuer rating and deposits and senior debt rating at BBB (high) and short-term instruments rating at R-2 (high).

Home Trust is the primary operating subsidiary of Home Capital Group Inc.

The agency also confirmed Home Capital Group’s senior debt rating at BBB and short-term instruments rating at R-2 (middle).

The trend on all ratings was revised to negative from stable.

Under DBRS’ “Global Methodology for Rating Banks and Banking Organizations,” Home Trust has an intrinsic assessment of BBB (high) and a support assessment of SA3. The SA3 rating, which reflects the expectation of no timely external support, results in the final rating being equivalent to the intrinsic assessment.

The action follows a detailed review of Home Capital Group’s operating results, financial fundamentals and future prospects, the agency said.

DBRS explained that the negative trend reflects its view that the Department of Finance Canada’s new mortgage rules, which took effect in October, will likely have a negative impact on Home Capital Group’s origination volumes as well as loans under administration (LUA) and, as a result, be a headwind to profitability.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.