S&P rates Equitable preferreds BBB-

S&P said it assigned its BBB- issue rating to Equitable Holdings Inc.’s proposed issuance of up to $500 million of noncumulative perpetual preferred fixed-rate reset shares.

The company intends to use the proceeds for general corporate purposes.

“We consider these shares to be hybrid securities and will assign intermediate equity credit to them due to the deferability of dividends. We also expect they will be a permanent part of Equitable’s capital structure. The interest rate resets every five years, and the preferred shares will be callable within the three months preceding each reset date, but we do not expect the reset rate to be substantially higher than the initial fixed rate. As such, we do not foresee an incentive for management to redeem the shares early,” S&P said in a press release.

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