Fitch rates Engie notes BBB+

Fitch Ratings said it assigned an expected rating of BBB+ to Engie SA's planned undated callable deeply subordinated notes.

The securities qualify for 50% equity credit, Fitch said.

The obligations under the notes are direct, unconditional, unsecured and lowest-ranking subordinated obligations, the agency said.

The proceeds will be used to refinance the €1 billion perpetual non-call June 2019 hybrid issue, Fitch said.

The planned notes are rated two notches lower than Engie's long-term issuer default rating given their deep subordination and consequently lower recovery prospects in a liquidation or a bankruptcy scenario than senior obligations, the agency said.

The notes only rank senior to the claims of shareholders, Fitch said.

The ratings consider Engie's scale, diversification and low CO2 footprint with a business profile, the agency said.

With the recent exit from exploration and production and LNG, Engie has substantially reduced its earnings sensitivity to commodity prices, Fitch said.

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