Moody’s rates Tryg Forsikring notes Baa3

Moody’s Investors Service said it assigned a Baa3(hyb) rating to the proposed floating rate perpetual restricted tier 1 capital notes to be issued by Tryg Forsikring A/S.

The notes will be partially or fully written down if either Tryg Forsikring’s stand-alone solvency II ratio or its consolidated solvency II ratio breaches certain triggers.

“The Baa3(hyb) rating of the notes reflect their deeply subordinated status (the notes rank pari-passu with existing Tryg Forsikring’s restricted tier 1 instruments and are junior to all other of Tryg Forsikring’s debt instruments and policyholder obligations), the risk of coupon cancellation on a non-cumulative basis, and the risk of principal write-down under certain circumstances,” Moody’s said in a press release.

The notes are intended to form part of the funding to acquire parts of Codan Forsikring A/S from RSA Insurance Group plc. “Tryg plans to finance the bulk of the acquisition price via a capital raise, which will be beneficial for Tryg’s leverage, whereas the proposed notes will not have a meaningful impact on leverage,” Moody’s said.

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