S&P lowers Prudential’s hybrid notes

S&P said it lowered by one notch, to BBB, the two hybrid notes for which Prudential plc is seeking consent to amend terms and conditions. The two instruments are the £600 million 5% dated tier 2 notes due 2055 and the £700 million 5.7% dated tier 2 notes due 2063.

Prudential is seeking bondholder consent to include an issuer optional substitution provision in the notes' terms and conditions. This will enable the substitution of these notes to M&GPrudential as the issuer on, or prior to, the demerger of the Prudential group becoming effective, S&P said in a release.

The ratings on Prudential's other hybrids are unaffected by the rating action.

Historically, S&P had rated the two notes two notches below its A long-term issuer credit rating on Prudential plc, based on the understanding that the noteholders are subordinated to the group's senior creditors and the interest deferral provisions.

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