Fitch Ratings has assigned
The assignment of a final rating is contingent on the receipt of final documents conforming to information already reviewed.
Key Rating Drivers
The notes are rated three notches below
The proposed subordinated notes will have an expected amount of
The notes include a mandatory interest deferral feature that would be triggered if the company or the group is unable to meet its solvency capital requirements, (SCR) as defined under the Solvency II directive. Fitch regards the mandatory interest deferral feature as leading to moderate non-performance risk.
The proceeds of the notes will be used, in whole or in part, to finance Coface's concurrent tender offer on the company's outstanding
The notes are intended to qualify for 100% regulatory capital recognition under Solvency II. The notes will receive 100% equity credit in Fitch's Prism Factor-Based Model (Prism FBM), due to the application of the agency's 'regulatory override' approach. However, given that it is a dated instrument, the notes will be treated as 100% debt in Fitch's financial debt leverage calculation.
Fitch expects the combined effect of the new issue and the concurrent tender offer on existing debt to be marginally negative for the financial leverage ratio (FLR). We estimate that, based on an expected 50% buy-back of existing debt and the
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
An upgrade of Coface's Long-Term IDR would be reflected on the notes' rating.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
A downgrade of Coface's Long-Term IDR would be reflected on the notes' rating.
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
Date of Relevant Committee
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
RATING ACTIONS
Entity / Debt
Rating
subordinated
LT
BBB+(EXP)
Expected Rating
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VIEW ADDITIONAL RATING DETAILS
Additional information is available on www.fitchratings.com
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