Fitch rates AXA notes BBB

Fitch Ratings said it assigned AXA SA's €2 billion subordinated notes a BBB/rating watch negative rating.

The notes are rated three notches below AXA's long-term issuer default rating of A to reflect their subordination and loss-absorption features, in line with Fitch's notching criteria, the agency said.

The rating watch negative reflects that on AXA, Fitch said.

The agency said the issue would increase AXA's financial leverage ratio on a pro-forma basis based on financial year ended Dec. 31 figures to around 25% from 23%.

Fitch said it expects AXA's financial leverage post acquisition of XL to increase further to around 30%, assuming the successful IPO of the group's existing U.S. life operations.

“AXA's fixed-charge coverage ratio would also decrease following the issue. However, both ratios remain commensurate with the group's ratings,” the agency said in a news release.

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