Moody’s rates Belrose securities Baa1

Moody's Investors Service said it assigned a Baa1 senior unsecured debt rating to the pre-capitalized trust securities (P-Caps) expected to be issued by Belrose Funding Trust, a Delaware statutory trust. The P-Caps, which mature in August 2030, are intended to serve as a source of capital and liquidity for Lincoln National Corp., whose Moody’s senior unsecured rating is Baa1. Moody's said it also assigned a stable outlook to the trust, consistent with the outlook of Lincoln.

According to the terms of the facility, Belrose Funding Trust will use the proceeds to purchase high-quality collateral for the benefit of investors.

“Lincoln has the right to issue senior notes to Belrose Funding Trust in exchange for the high-quality collateral held within the trust. Because of Lincoln's unilateral right to issue senior notes to the trust, and because any such notes would rank equal to all other senior unsecured debt of Lincoln, the rating of the P-Caps is aligned with the Baa1 senior debt rating of Lincoln,” Moody’s said in a press release.

The agency said if Lincoln exercises its right to draw on the assets held by Belrose in exchange for issuing senior notes, Moody's would include the outstanding amount of the notes in its financial leverage calculation for Lincoln.

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