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Fitch Ratings affirms Federation Des Caisses Desjardins Du Quebec's bonds at 'AAA'.

New York: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, affirmed Federation Des Caisses Desjardins Du Quebec's (FCDQ; rated 'AA-'/'F1+'/Stable Outlook) CAD4.4 billion equivalent legislative mortgage covered bonds at 'AAA'/ Stable Outlook.

The 'AAA' credit loss has decreased to 7.2% from 8.2%, reflecting the reduction of the sustainable market value decline in Quebec, where 100% of the cover pool is located. The lower than peers' sustainable loan-to-value ratio and debt to income ratio results in a lower credit loss of FCDQ's cover pool.

The programme's IDR uplift is unchanged at zero notches since the Canadian bank bail-in rules, if finalized, are not applicable to FCDQ. Should FCDQ be subject to a similar set of bail-in rules set by its provincial regulator, the agency will reassess the IDR uplift. The unchanged PCU of six notches reflects the 12-months liquidity protection in place allowed by the 12-month maturity extension applying to the soft bullet bonds and a dynamic reserve to cover three-month senior expenses and interest payments, which will be funded when FCDQ is rated below 'A' or 'F1'.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Geographic Code:1CQUE
Date:May 3, 2018
Words:192
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