S&P rates Volkswagen hybrids BBB-

S&P said it assigned a BBB- long-term issue rating to the proposed six- and 10-year non-call, perpetual, optionally deferrable and subordinated hybrid notes to be issued by Volkswagen International Finance NV, under the guarantee of the parent company, Volkswagen AG.

The completion and size of the transaction will be subject to market conditions, but S&P said it anticipates total issuance of up to €2.75 billion.

The agency said it assumes Volkswagen will use the proceeds to call a hybrid instrument, achieving first call dates in September 2018, with the remainder used for general corporate purposes.

The issuance of the proposed hybrid notes does not affect a view of the equity content of the company's outstanding hybrid capital securities, except for the hybrid assumed to be called in September 2018, S&P explained.

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