Moody's: Prudential notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to the $550 million perpetual subordinated tier one securities to be issued by Prudential plc under its £5 billion medium-term note program. The rating is in line with existing junior subordinated debt issued by Prudential.

The outlook is negative.

The rating reflects the company's A2 senior debt rating and the agency's standard notching practice for such instruments, Moody's said. The perpetual subordinated instrument ranks alongside similar securities issued by Prudential, the agency said.

The transaction will boost the capital available to Prudential for regulatory solvency purposes, Moody's said. The hybrid features of the instrument also will result in some equity credit under Moody's debt equity continuum based on its subordination, limited interest deferral characteristics and maturity, the agency added.

The company's fixed-charge coverage remains weak for the rating level at 4.3x in 2009, Moody's said, as the current weak economic environment has impacted most insurers globally.

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