S&P provides BBB to AXA notes

S&P said it assigned its BBB long-term issue rating to the $850 million tier 2 undated subordinated notes issued by AXA (A-/positive/A-2), the holding company of AXA Group (core operating entities rated A+/positive/--).

The agency rates the notes two notches below the long-term counterparty credit rating on the issuer, AXA. The first notch reflects S&P’s understanding that the noteholders will be subordinated to AXA's senior creditors, and the second notch is based on the insurer's option to defer interest on the notes. The issuer's option to defer the coupon payments is restricted if, during the previous six-month period, a dividend on any class of shares has been declared or paid.

Furthermore, S&P noted that interest deferral is mandatory if AXA breaches its solvency requirement.

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