S&P rates VW hybrids BBB-

S&P said it rated Volkswagen AG’s planned subordinated hybrid securities offering BBB-. VW will issue the notes through its Volkswagen International Finance NV subsidiary. VW will guarantee the notes on a subordinated basis.

“The completion and size of the transaction will be subject to market conditions, but we anticipate total issuance of up to €2 billion,” S&P said in a press release.

The agency noted it deducted a notch from the issuer rating for subordination because VW is investment-grade rated and another for the option to defer interest. “The deduction for payment flexibility is only one notch because we consider that there is a relatively low likelihood that VW will defer interest payments.”

VW plans to use the proceeds to refinance its €1.5 billion hybrid securities, which has a first call date in December.

The outlook is stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.