Moody's: Westpac convertibles Baa2 (hyb)

Moody's Investors Service said it assigned a Baa2 (hyb) rating to the perpetual subordinated contingent convertible securities issued by Westpac Banking Corp. acting through its New Zealand branch.

Moody's also said it assigned a provisional Baa2 rating to the company's SEC tier 1 shelf registration statement.

The agency said it expects the notes will qualify as additional tier 1 capital under the prudential standards set out by the Australian Prudential Regulation Authority.

The Baa2 (hyb) rating is positioned three notches lower than the company's A2 adjusted baseline credit assessment. This is in line with Moody's standard notching guidance for preferred securities with loss triggered at the point of non-viability on a contractual basis, the agency said.

The three-notch difference from the adjusted baseline assessment reflects the higher expected loss on these securities and the impairment associated with discretionary coupon suspension, Moody's said.

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