Fitch applies BBB to Bupa Finance debt

Fitch Ratings said it assigned Bupa Finance plc's £400 million subordinated debt securities issue a BBB rating.

The notes are rated three notches below Bupa’s A issuer default rating to reflect their subordination (two notches) and moderate risk of non-performance (one notch), in line with Fitch's notching criteria.

Proceeds will be used to support the recently announced proposed acquisition of Oasis Dental Care by Bupa and to term out some of the bridge financing to achieve a more long-term capital structure.

The securities have a 10-year bullet maturity and pay a 5% fixed coupon semi-annually. Fixed-charge coverage is expected to remain solid given Bupa's strong track record of earnings generation. Fitch said it expects the group's financial leverage to remain commensurate with the ratings.

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