Moody’s rates UBS notes Baa3

Moody’s Investors Service said it assigned a rating of Baa3 to the guaranteed dollar-denominated senior notes to be issued by UBS Group Funding (Jersey) Ltd.

The notes are guaranteed on a senior basis by UBS Group AG, the parent holding company for UBS AG, the agency said.

The outlook is stable, consistent with the stable rating outlook for UBS AG.

The Baa3 rating on the notes reflects the credit profile of UBS Group, Moody’s said, since the guarantee is consistent with the agency’s principles for credit substitution.

The Baa3 rating is one notch below UBS’s Baa2 baseline credit assessment, reflecting a view that the notes are likely to face a high loss-given-failure due to the relatively modest amount of senior holding company debt outstanding, as well as the limited protection from subordinated instruments, the agency said.

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