Moody’s rates Vodafone hybrids Baa3

Moody's Investors Service said it assigned a Baa3 rating to Vodafone Group plc's proposed issuance of euro-denominated subordinated fixed-rate reset five- and six-year non-call capital securities due 2078 and 2079, pound sterling-denominated subordinated fixed-rate reset seven-year non-call capital securities due 2078 and dollar-denominated subordinated fixed-rate reset six-year non-call capital securities due 2078.

The ratings are on review for downgrade, along with the rest of Vodafone’s ratings.

Vodafone plans to use the hybrid securities to fund a portion of the €18.4 billion acquisition of Liberty Global plc's (Ba3 stable) assets in Germany and Central and Eastern Europe.

“The Baa3 ratings we have assigned to the hybrid securities is two notches below Vodafone's senior unsecured rating of Baa1, primarily because the instrument is deeply subordinated to other debt in the company's capital structure,” Laura Pérez, Moody's vice president, senior credit officer and lead analyst for Vodafone, said in a news release.

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