Fitch rates Repsol notes BB+

Fitch Ratings said it assigned an expected rating of BB+ to Repsol International Finance’s proposed multi-currency subordinated notes.

The notes are guaranteed by Repsol SA.

The proceeds will be used to finance the recently announced acquisition of Canada’s Talisman Energy Inc., Fitch said.

The expected rating on the proposed hybrid capital securities reflects the highly subordinated nature of the notes, considered to have lower recovery prospects in a liquidation or bankruptcy scenario, the agency said.

Fitch said it notched the proposed notes down by two notches from Repsol’s long-term issuer default rating of BBB given their deep subordination and consequently, the lower recovery prospects relative to the senior obligations of the issuer and guarantor.

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