Fitch rates AXA notes BBB

Fitch Ratings said it assigned a BBB rating to AXA SA's $1 billion dated subordinated notes.

The notes are rated three notches lower than AXA's issuer default rating of A with two notches for the level of subordination and one notch for its moderate non-performance risk, Fitch said.

The notes have been issued by AXA under its €17 billion euro medium-term note program.

The proceeds will be used mainly to finance outstanding debt, Fitch said.

The notes have been issued with a fixed coupon of 5.125% with a maturity of 30 years, but are callable after 10 years, the agency explained.

If the issue is not called at the first call date in January 2027, the coupon will reset from fixed- to floating-rate with a margin, including a 100 basis points step-up, Fitch said.

The issue will rank pari passu with AXA's other dated subordinated notes, junior to unsecured unsubordinated obligations and senior to any undated subordinated notes or obligations, the agency said.

The notes are expected to qualify for tier 2 regulatory capital recognition and the notes will receive 100% equity credit due to the application of the regulatory override, Fitch said.

The agency said it views the issue as neutral to AXA's financial debt leverage, fixed-charge coverage and capital adequacy as the new notes have been issued mainly for refinancing purposes.

The issue also lengthens the maturity profile of the group's financial debt, Fitch said.

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