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Email this7:11 am
December 7, 2011
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Moody's downgrades credit ratings for Canada's Big 6 banks.
Ratings agency cites debt level, high house prices as reason for concern.
TD Bank was lowered to Aa2, while the other big banks were dropped to A1. Moody's highest credit rating grade is Aaa. According to Moody's, credit ratings that start with Aa are "high quality and are subject to very low credit risk." Ratings that start with just A are "upper-medium grade and are subject to low credit risk."
All of the banks are still at levels well above what's considered investment grade, and therefore still desirable for major institutional investors.
https://www.moodys.com/research/Moodys-downgrades-Canadian-Banks--PR_366355
9:41 am
September 5, 2013
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I would take it as a grain of salt, and more interested in what motivation they have.
...
They rated AIG and Lehman Brothers as AAA, AA minutes before they were collapsing. During the congressional hearings, Fitch said that Fitch analysts in charge of Lehman Brothers and AIG were “disappointed” and “surprised.”
...
10:02 am
April 6, 2013
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Moody's is correct in finding an increase in risk. But, the increase is not as significant as the press has made it to be.
For example, TD Bank was downgraded one notch from Aa1 to Aa2. That means TD Bank had about the same risk of default as the Province of Alberta that is currently rated Aa1. Now, Moody's thinks TD Bank has about the same risk as the provinces of Ontario and Manitoba that share that same Aa2 rating.
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