S&P rates Swiss Re notes A

S&P said it assigned an A long-term issue rating to the proposed dollar-denominated subordinated fixed-rate callable notes to be issued by Swiss Re Finance (Luxembourg) SA and guaranteed by Swiss Reinsurance Co. Ltd.

The securities will benefit from an unconditional and irrevocable subordinated guarantee from Swiss Re.

The issue rating on the proposed notes is two notches lower than the AA- rating on Swiss Re, reflecting the standard notching for deferrable subordinated debt issues, S&P said.

The agency said it rated the proposed debt on the understanding that, when issued, the notes will be subordinated to debt held by senior creditors and that interest will be deferrable.

S&P said it expects to classify the notes as having intermediate equity content under the hybrid capital criteria.

There are reasonable grounds for concern that either company would be unable to pay its debts as they fall due, the agency said, or their assets would not exceed their liabilities.

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