Moody’s gives Validus preferreds Ba1 (hyb)

Moody's Investors Service said it assigned new preference shares of Validus Holdings, Ltd. a Ba1(hyb) rating with a positive outlook.

The offering will consist of depositary shares, each of which will represent a 1/1,000th interest in a share of series A preference shares ($0.175 par value and $25,000 liquidation preference per share, equivalent to $25 per depositary share). The total offering is expected to be about $150 million and offer an annual dividend of roughly 5.875%.

The preferred shares will be non-participating, non-cumulative, redeemable at the issuer's option beginning June 2021, and have limited special voting rights.

Moody’s said the Ba1(hyb) rating on the preferred shares reflects their junior ranking to all debt and two notches below the senior debt rating based on the agency’s standard criteria for insurance holding companies. Moody's regards these preferred shares as basket C hybrids (50% equity credit) based on their subordination and perpetual maturity.

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