S&P rates AXA notes BBB+

S&P said it assigned a BBB+ long-term issue rating to the tier 2 subordinated notes issued by AXA, the holding company of AXA Group.

The agency said it assigned a rating that is two notches lower than the long-term counterparty credit rating on the issuer, according to the S&P’s hybrid debt criteria.

AXA can exercise a call of the notes in 2027 and subsequently at each quarterly interest payment date thereafter, the agency explained.

The coupon is fixed until the first call date, when it will convert to a floating coupon, S&P said.

The proceeds will be used to prepare for the refinancing of upcoming calls during advantageous market conditions, the agency said.

The company’s financial leverage is expected to increase temporarily following this issue, but trend back down as call dates fall due, S&P said.

The company’s fixed-charge coverage will remain higher than 8x, a level consistent with the rating, the agency added.

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