Moody’s gives Standard Chartered securities Ba1

Moody's Investors Service said it assigned a Ba1 (hyb) rating to the proposed high-trigger additional tier 1 securities to be issued by Standard Chartered plc (A2 senior unsecured debt, review for upgrade).

The outlook is stable.

Moody’s said the Ba1 (hyb) rating is based on the likelihood of Standard Chartered’s capital ratio reaching the conversion trigger, the probability of a bank-wide failure and loss severity, if either one or both these events occur.

The agency assesses the probability of a trigger breach using an approach that is model-based, incorporating the firm's creditworthiness, its most recent common equity tier 1 level, and qualitative considerations particularly with regard to how the firm may manage its common equity tier 1 level on a forward-looking basis.

Moody’s rates to the lower of the model-based outcome and the bank's non-viability security rating, which captures the risk of coupon suspension on a non-cumulative basis. Its approach to rating high-trigger contingent capital securities is described in its banks rating methodology, published in March.

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