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Moody’s rates Momentum notes Ba3
Moody’s Investors Service said it assigned Ba3(hyb) global scale and Aa3.za(hyb) national scale ratings to the ZAR 750 million of guaranteed subordinated notes due 2028 to be issued in two tranches by Momentum Metropolitan Life Ltd.
The notes will be issued under its ZAR 10 billion guaranteed unsecured subordinated note program and are intended to qualify as tier 2 capital under South Africa’s insurance regulations.
The ratings are consistent with the standard notching practices for debts issued by insurance operating companies and reflect the notes’ subordination, the mandatory, based on breach of regulatory capital requirements, interest and principal deferral mechanisms and the cumulative nature of deferred interest, in case of deferral, Moody’s said.
The proceeds are intended to refinance ZAR 750 million of Momentum’s subordinated debt maturing March 2021. Therefore, the new debt is not expected to hurt Moody’s assessment of its adjusted financial leverage, which was 23.5% at June 30.
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