S&P assigns A+ to Allianz notes

S&P said it assigned its A+ long-term issue rating to the undated subordinated dollar-denominated notes proposed by Allianz SE (AA/stable/A-1+).

The rating incorporates the agency’s methodology for junior subordinated debt issues: The agency rated the perpetual notes two notches below the long-term counterparty credit rating on the issuer.

S&P said the rating is based on its understanding that the holders of the notes will be subordinated to Allianz's senior and dated subordinated creditors, and that Allianz has the option of deferring interest if, during the previous six-month period: No dividend or other distribution was declared, and no other distribution or payment in respect of any class of shares was made; or no payment on account of the balance sheet profit has been made by the issuer since the last ordinary general meeting of shareholders.

Furthermore, the agency understands that interest deferral is mandatory if an insolvency event or a solvency capital event of the issuer or issuer's group has occurred, where own funds are not sufficient to cover solvency capital or minimum capital requirements. The regulator may also prohibit the interest payment.

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