Fitch Ratings has assigned a 'BBB' rating to Northern Trust Corporation's (Northern) preferred stock issuance.
The preferred stock rating is detailed below and is consistent with Fitch's notching criteria from each of the entities Viability Rating (VR). Northern's IDR is currently rated
'AA-/F1+'; VR 'aa-' by Fitch; all of which were last affirmed on Feb. 12, 2014, following Fitch's trust and processing bank peer review.
The five notch differential in the ratings of Northern's preferred stock include two notches for loss severity given these securities deep subordination in the capital structure, and three notches for non-performance given that the coupon of the securities is non-cumulative and fully discretionary.
KEY RATING DRIVERS - PREFERRED STOCK AND OTHER HYBRID SECURITIES
Northern's preferred stock rating is five notches below the entities VR of 'aa-' in accordance with Fitch's assessment of each instrument's respective non-performance and relative loss severity risk profiles.
KEY RATING SENSITIVITIES - PREFERRED STOCK AND OTHER HYBRID SECURITIES
The ratings of preferred stock issued by Northern are primarily sensitive to any change in the company's VR.
Fitch Rates the following:
Northern Trust Corporation
--Preferred Stock 'BBB'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Financial Institutions Rating Criteria' (January 2014);
--'Rating FI Subsidiaries and Holding Companies' (January 2014);
--'Assessing and Rating Bank Subordinated and Hybrid Securities' (January 2014);
--'U.S. Bank HoldCos & OpCos: Evolving Risk Profiles' (March 2014).
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732397
Rating FI Subsidiaries and Holding Companies
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209
Assessing and Rating Bank Subordinated and Hybrid Securities Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732137
U.S. Bank HoldCos & OpCos: Evolving Risk Profiles
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=742096
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=842478
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Contacts:
Primary Analyst
Justin Fuller, CFA
Senior
Director
+1-312-368-2057
Fitch Ratings, Inc.
70 W.
Madison, Street
Chicago, IL 60602
or
Secondary Analyst
Chris
Wolfe
Managing Director
+1-212-908-1171
or
Committee
Chairperson
Joo-Yung Lee
Managing Director
+1-212-908-0560
or
Media
Relations
Brian Bertsch, +1 212-908-0549
brian.bertsch@fitchratings.com