S&P rates AXA notes BBB+

S&P said it assigned a BBB+ long-term issue rating to the tier 2 subordinated notes issued by AXA, the holding company of AXA Group.

The agency said it subsequently put the issue rating on CreditWatch negative in line with the long-term issuer credit rating on AXA Group.

S&P said it rates the notes two notches lower than the long-term issuer credit rating on AXA in accordance with criteria for hybrid debt.

The agency said it understands that the noteholders will be subordinate to AXA's senior creditors, and that AXA has the option of deferring interest on the notes.

The proceeds will be used to finance its acquisition of commercial non-life insurer, XL Group Ltd., S&P said.

AXA Group's financial leverage will increase moderately following the issuance, the agency said, but that the fixed-charge coverage ratio will remain well above 8x.

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