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French Insurer La Mondiale's Restricted Tier 1 Deeply Subordinated Notes Rated 'BBB-'
14-Oct-2019 05:02 EDT
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French Insurer La Mondiale is issuing deeply subordinated notes that will be eligible as restricted tier 1 (RT1) capital under Solvency II.
We are assigning our 'BBB-' issue-level rating to these notes.
We expect to classify these notes as having intermediate equity content.
PARIS (S&P Global Ratings) Oct. 14, 2019--S&P Global Ratings today said it assigned its 'BBB-' long-term issue credit rating to the restricted Tier 1 (RT1) notes French insurer La Mondiale plans to issue. The rating is subject to our receipt and review of the bonds' final terms and conditions.
The rating on the bonds is three notches below the long-term issuer credit rating (ICR) on La Mondiale (A-/Positive/--);
One notch to reflect the notes' deeply subordinated status to senior bondholders;
One notch to reflect the risk of potential write-down of principal; and
One notch to reflect the mandatory and unconditional optional interest cancellation features.
The notching on this instrument is wider compared with that on La Mondiale's other subordinated instruments because noteholders face a potential loss of principal should a mandatory write-down trigger be breached.
Our rating and equity content assessment takes into account our understanding of the following:
The bonds are deeply subordinated to senior creditors.
The issuer has unconditional discretion to cancel interest payments.
Interest cancellation is mandatory under some circumstances. These include if the solvency condition is not met, or if under Solvency II regulation, La Mondiale or SGAM AG2R La Mondiale own funds (capital resources) cannot cover either the solvency capital requirement (SCR) or minimum capital requirement (MCR), or upon insufficient distributable items.
The bonds will be eligible as RT1 capital under Solvency II.
The notes will be written down in the event that own fund items eligible to cover the SCR is equal to or less than 75% of the SCR, the amount of own fund items eligible to cover the MCR is equal to or less than the MCR, or the SCR has been breached for more than three month
14-Oct-2019 05:02 EDT
View Analyst Contact Information
Table of Contents
French Insurer La Mondiale is issuing deeply subordinated notes that will be eligible as restricted tier 1 (RT1) capital under Solvency II.
We are assigning our 'BBB-' issue-level rating to these notes.
We expect to classify these notes as having intermediate equity content.
PARIS (S&P Global Ratings) Oct. 14, 2019--S&P Global Ratings today said it assigned its 'BBB-' long-term issue credit rating to the restricted Tier 1 (RT1) notes French insurer La Mondiale plans to issue. The rating is subject to our receipt and review of the bonds' final terms and conditions.
The rating on the bonds is three notches below the long-term issuer credit rating (ICR) on La Mondiale (A-/Positive/--);
One notch to reflect the notes' deeply subordinated status to senior bondholders;
One notch to reflect the risk of potential write-down of principal; and
One notch to reflect the mandatory and unconditional optional interest cancellation features.
The notching on this instrument is wider compared with that on La Mondiale's other subordinated instruments because noteholders face a potential loss of principal should a mandatory write-down trigger be breached.
Our rating and equity content assessment takes into account our understanding of the following:
The bonds are deeply subordinated to senior creditors.
The issuer has unconditional discretion to cancel interest payments.
Interest cancellation is mandatory under some circumstances. These include if the solvency condition is not met, or if under Solvency II regulation, La Mondiale or SGAM AG2R La Mondiale own funds (capital resources) cannot cover either the solvency capital requirement (SCR) or minimum capital requirement (MCR), or upon insufficient distributable items.
The bonds will be eligible as RT1 capital under Solvency II.
The notes will be written down in the event that own fund items eligible to cover the SCR is equal to or less than 75% of the SCR, the amount of own fund items eligible to cover the MCR is equal to or less than the MCR, or the SCR has been breached for more than three month