Moody’s rates Royal Bank of Scotland notes Ba1 (hyb)

Moody's Investors Service said it assigned a B1 (hyb) rating to the $3.15 billion dual-tranche high trigger additional tier 1 notes issued by Royal Bank of Scotland Group plc (long-term senior unsecured debt Ba1) on Aug. 10.

These perpetual non-cumulative AT1 securities rank junior to all liabilities of the bank, including subordinated liabilities other than parity securities, but they rank senior to common shares and existing mandatory convertible notes. Coupons may be cancelled on a non-cumulative basis at the issuer's option and on a mandatory basis, subject to the availability of distributable items, the meeting of solvency conditions and regulatory discretion.

The principal of the securities will convert into equity if Royal Bank of Scotland’s consolidated fully loaded Basel III common equity tier 1 capital ratio falls below 7%.

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