Moody’s rates FWD notes Ba1(hyb)

Moody's Investors Service said it assigned a Ba1(hyb) rating to FWD Ltd.'s subordinated perpetual capital securities.

The company also has a Baa2 issuer rating with negative outlook.

The benefits that the company once received due to diversification from FWD General Insurance Co. Ltd., the non-life insurance subsidiary of FWD Ltd., through contributions of dividends, is now less evident, Moody’s explained.

The proposed subordinated perpetual hybrid securities will constitute direct, unconditional, unsecured and subordinated obligations of the issuer, ranking pari passu with any preference shares of FWD, the agency said.

The Ba1(hyb) rating is positioned two notches lower than the company’s issuer rating to reflect the fact that these securities will rank behind senior and subordinated debt obligations, Moody’s said, and is in line with the standard notching guidance for preference shares.

The ratings also reflect the optional coupon deferral mechanisms and cumulative nature of deferred coupons, in case of deferral, the agency said.

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