1st Jun 2020 06:55
(Alliance News) - Moody's Investors Service said Friday it has assigned a Baa1 hybrid rating to Direct Line Insurance Group PLC's GBP260 million fixed rate subordinated tier 2 notes due 2032, with a stable outlook.
The FTSE 250-listed insurer had on the same day priced the notes, the proceeds of which will go towards improving its liquidity during the heightened uncertainty within the macroeconomic environment.
The rating is derived from the A1 insurance financial strength rating of UK Insurance Ltd, which is the main insurance operating unit of Direct Line.
However, the difference between the two ratings is three notches determined by Moody's, namely the contractual subordination of the notes, the mandatory coupon deferral mechanism and the cumulative nature of deferred coupons.
Moody's noted that according to the terms and conditions, Direct Line can exchange or alter the terms of the notes under certain circumstances, but the credit agency believes that cannot be changed in a way which is materially adverse to the investor.
By Dayo Laniyan; [email protected]
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