S&P assigns Rexam hybrids BB+

Standard & Poor's said it assigned its BB+ long-term issue rating to a proposed £500 million equivalent in 60-year subordinated hybrid securities to be issued by Rexam plc (BBB/negative/A-3).

The securities are optionally and mandatorily interest deferrable, deeply subordinated and tax-deductible, S&P said, adding that it considers the notes to have intermediate equity content, based notably on their long maturity of 60 years, optional deferability of interest, mandatory cumulative compounding deferability that requires immediate settlement, triggered by the breach of an adjusted net debt/adjusted EBITDA ratio and deep subordination, as principal and interest are subordinated to all other debt obligations.

The two-notch differential between the BB+ issue rating on the proposed securities and the BBB long-term corporate credit rating on Rexam reflects S&P's notching criteria, which call for a one-notch differential for subordination, as the corporate credit rating is in the investment-grade category and an additional one-notch differential for payment flexibility.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.