Fitch rates FWD notes BB+

Fitch Ratings said it assigned an expected rating of BB+ to FWD Ltd.'s proposed dollar-denominated perpetual capital securities.

The proposed securities will be FWD's direct, unsecured and subordinated obligations, Fitch said.

The proceeds will be used to strengthen the issuer's liquidity and fund the ongoing growth of its life insurance subsidiary in Hong Kong, if needed, the agency said.

The proposed securities are rated three notches below FWD's issuer default rating due to their subordination status and non-performance risk, Fitch said.

The securities are notched down two levels to reflect the poor recovery prospects of subordinated debts issued at a holding company, the agency said.

In the event of winding-up, the rights and claims of security holders rank pari passu with those of any parity obligations, such as the issuer's preference shares, Fitch said.

However, the securities rank senior to junior obligations, including ordinary shares, the agency said.

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