OREANDA-NEWS. Fitch Ratings expects to rate Stifel Financial Corp.'s (Stifel) $75 million preferred stock issuance 'B+(EXP)'.

The preferred stock is expected to be subordinated to existing unsecured debt but senior to common units. Dividends, when and if declared by the board of directors, will be payable quarterly. Distributions on the preferred stock are non-cumulative. The preferred stock is perpetual in nature, but may be redeemed, at Stifel's option, five-years after issuance. The proceeds from the issuance are designated for general corporate purposes.

KEY RATING DRIVERS

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

The hybrid instrument is expected to be rated five notches lower than Stifel's Viability Rating (VR) of 'bbb', in accordance with Fitch's 'Global Bank Rating Criteria' dated March 20, 2015. The preferred stock rating includes 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.

RATING SENSITIVITIES

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

Stifel's preferred stock rating is sensitive to changes in Stifel's VR, and would move in tandem with any changes to the VR. For more information on Stifel's VR rating sensitivity, please see Fitch's press release on Stifel, dated July 14, 2015.

Fitch expects to assign the following rating:

Stifel Financial Corporation

--Preferred stock 'B+(EXP)'.