S&P affirms Royal & Sun Alliance

Standard & Poor's said it affirmed its BBB long-term junior subordinated debt rating on the £375 million perpetual fixed- and floating-rate subordinated notes issued by Royal & Sun Alliance Insurance Group plc (R&SA) and guaranteed by its subsidiary, Royal & Sun Alliance Insurance plc (A-/stable), following the receipt of final documentation.

The agency said that the rating on the notes reflects their equity-like characteristics, including their perpetual tenor, the subordination of bondholders to policyholders and senior creditors and the interest-deferral features.

The proceeds received by the company will be used to refinance the majority of its outstanding obligations in respect of its $500 million 8.95% junior subordinated notes dated Oct. 15, 2029, the agency noted, adding that the rationale for the refinancing is driven by R&SA's desire to improve the quality of its regulatory capital.

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