Moody's assigns BT hybrids Ba1

Moody's Investors Service said it assigned a Ba1 long-term rating to the proposed issuance of €500 million of capital securities due 2080 to be sold by British Telecommunications plc, a subsidiary of BT Group plc. The outlook is negative.

The Ba1 rating on the hybrid securities is two notches lower than British Telecommunication's Baa2 senior unsecured and issuer ratings. This reflects the deeply subordinated position of the proposed hybrid securities in relation to the senior unsecured obligations of British Telecommunications. The proceeds will be used for general corporate purposes.

The proposed hybrid securities, which will be guaranteed by BT Group on a subordinated basis, are long-dated with a 60-year maturity. The hybrid securities do not have any cross-default provisions. BT can opt to defer settlement of interest on the hybrid securities on a cumulative basis.

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