Moody’s rates Barclays Africa notes Ba2 (hyb)

Moody's Investors Service said it assigned a provisional Ba2 (hyb) rating to the proposed issuance of the subordinated Tier 2 notes from Barclays Africa Group Ltd. (long-term issuer rating Ba1, stable).

The Basel III-compliant notes will feature contractual loss-absorption features at the point of non-viability.

The rating is two notches below the baa3 adjusted baseline credit assessment of Barclays Africa’s main operating subsidiary, Absa Bank Ltd. This is in line with Moody's standard notching guidance for subordinated debt that includes contractual loss-absorption features triggered at the point of non-viability.

The notching captures both the increased loss severity associated with subordinated obligations, but also the potentially greater uncertainty associated with the timing of any principal write-down, the agency explained.

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