Moody's rates Charles Schwab notes A2

Moody's Investors Service said it assigned A2 ratings to Charles Schwab Corp.’s $625 million senior notes due 2018 and $375 million senior notes due 2025 and affirmed Schwab's A2 senior debt rating and Baa2 (hyb) noncumulative preferred stock rating. The outlook remains stable.

Moody's expects most of the expected $1 billion proceeds from Schwab's debt offering to be invested in U.S. Treasury securities (with a similar maturity profile to the debt tranches issued) retained at the parent entity. Schwab plans to retain the Treasuries as an additional source of liquidity that could be made available to its operating companies in times of need.

Schwab's A2 rating is supported by its superior brokerage and financial advisory franchise that operates at a scale that delivers strong and consistent profitability, the agency said, and the company also maintains a conservative financial policy evidenced by a simple and solid balance sheet.

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