By Zach Fuchs
Every year, the agencies roll out another classification scheme for hybrids. Fitch Ratings has finally streamlined its criteria into a five-tier Class A to E debt-equity continuum with a flat 30% cap on hybrids as a proportion of eligible capital.
On Fitch’s new continuum, Class A is pure equity, while Class E is pure debt. This is the reverse of the basket system employed by Moody’s, in which Basket A represents pure debt.
Crucially, the standards are now the same for banks and corporates.
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