S&P provides BBB- to RWE securities

Standard & Poor's said it assigned its BBB- long-term issue rating to the proposed long-dated, optionally deferrable and subordinated hybrid capital securities to be issued by RWE AG (BBB+/negative/A-2).

Under this transaction, RWE plans to issue two tranches, both denominated in euros. The exact amount of these tranches remains subject to market conditions.

The agency said it considers the proposed securities to have "intermediate" equity content until their respective first call dates, because they will meet the criteria in terms of subordination, permanence and deferability at the company's discretion during this period.

The proposed instruments may be used for the replacement of RWE's hybrid securities issued in 2010 (€1.75 billion 2010 securities) on their call date on Sept. 28, 2015. RWE has not yet made a decision on whether to call the 2010 securities.

Due to the increased likelihood of exercising the call option, S&P treats the upcoming call date as the 2010 securities' effective maturity and, as a result, it changed their equity content assessment to "minimal" from "intermediate" due to lack of permanence.

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