LONDON--(BUSINESS WIRE)--A.M. Best has assigned an issue rating of “bbb+” to the EUR 850 million senior dated subordinated notes due 2048 issued on 8 June 2016 by Assicurazioni Generali S.p.A. (Generali) (Italy). The outlook assigned to the rating is stable, which is in line with the outlook of the company’s issuer credit rating (ICR).
The notes have been issued by Generali under the EUR 15 billion Euro Medium Term Note programme that was renewed in May 2016. The senior dated subordinated notes will pay a fixed annual coupon of 5.00% through to their first call date in 2028 and thereafter of three month Euribor reference rate plus 5.35%.
Generali intends to use the proceeds of this issue to redeem the subordinated debt of the group that has a first call date in 2017 and amounted to EUR 869 million at 31 December 2015.
Although Generali’s debt leverage ratio has increased temporarily following the issue of these notes, it is expected to move to a more moderate level over the course of the year. A.M. Best will continue to monitor Generali’s interest coverage and leverage ratios.
The rating of the senior dated subordinated notes is two notches below Generali’s ICR, reflecting the fact that they are subordinated to Generali’s senior creditors, but senior to any of the company’s deeply and more deeply subordinated obligations.
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