Fitch Rates Webster Financial Corporation's Series E Non-Cumulative Perpetual Preferred Stock 'B+'

NEW YORK--()--Fitch Ratings expects to assign a 'B+' rating to Webster Financial Corporation's non-cumulative perpetual preferred issuance. The issuance size will be between $110 million to $126.5 million. The securities will bear an annual coupon of 6.4%, payable quarterly. The securities are perpetual but are callable in five years.

RATING DRIVERS AND SENSITIVITIES

Bank hybrid securities, such as this preferred issuance, are notched down from the issuing entity's viability rating. Webster's 'bbb' viability rating, which embodies the standalone assessment of the institution, is therefore a ratings driver for the preferred issuance.

The notch differential reflects an assessment of loss severity of the preferred issuance relative to the average recoveries assumed for a typical bank senior debt instrument. The differential is also indicative of incremental nonperformance risk. In this case, the hybrid instrument is rated five notches lower than Webster's viability rating. This reflects the designed loss absorbing nature of the preferred stock as well as its non-cumulative or deferral feature.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);

--'Rating FI Subsidiaries and Holding Companies' (Aug. 10, 2012);

--'Risk Radar' (Oct. 15, 2012);

--'Rating Bank Regulatory Capital and Similar Securities' (Dec. 15, 2011)

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Rating FI Subsidiaries and Holding Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209

Risk Radar October 2012

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=691996

Rating Bank Regulatory Capital and Similar Securities

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=656371

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Contacts

Fitch Ratings
Primary Analyst, +1-212-908-0368
Jaymin Berg, CPA
Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Joseph Scott, +1-212-908-0624
Senior Director
or
Committee Chairperson
Joo-Yung Lee, +1-212-908-0560
Managing Director
or
Media Relations:
Brian Bertsch, New York, +1 212-908-0549
Email: brian.bertsch@fitchratings.com

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Contacts

Fitch Ratings
Primary Analyst, +1-212-908-0368
Jaymin Berg, CPA
Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Joseph Scott, +1-212-908-0624
Senior Director
or
Committee Chairperson
Joo-Yung Lee, +1-212-908-0560
Managing Director
or
Media Relations:
Brian Bertsch, New York, +1 212-908-0549
Email: brian.bertsch@fitchratings.com