S&P Global was quick to react to the PERLS X launch, and stated that it was its view that  "it is unlikely that the Australian Government's support for CBA and other Australian banks - assuming it would ever be needed - would extend to hybrid capital instruments issued by the banks". Accordingly, S&P's markdown of this instrument from CBA's standalone credit profile of A- to BB+ reflects the following factors: deduct one notch for PERLS X's subordinated status; two notches for the risk of partial or untimely payment; and one notch for a non-viability contingent capital feature that would require CBA to convert all or a proportion of PERLS X into ordinary shares or write them off, if a trigger event occurred. "We have assessed the proposed issue as having intermediate equity content," S&P wrote in a note to clients. "In our view, PERLS X Capital Notes would be able to absorb losses on a going-concern basis through non-payment of coupons and via a non-viability contingent capital clause that results in an exchange, write-down or conversion into common equity. "On issuance, we understand that PERLS X securities will qualify as fully compliant Basel III additional tier 1 capital under Australian Prudential Regulation Authority requirements. A replacement prospectus containing the margin will be available when the offer opens."