Fitch Ratings has assigned
The final rating follows a review of the final terms and conditions conforming to information already received when Fitch assigned the expected rating on
Key Rating Drivers
The notes are rated three notches below
The subordinated notes have a maturity of 10 years and a fixed coupon of 6%.
The issue ranks junior to Coface's senior notes and pari passu with the insurer's ordinarily subordinated securities. This level of subordination results in Fitch's 'poor' baseline recovery assumption for the issue.
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 are being used, in whole or in part, to finance the buyback - effective on
The notes 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 are treated as 100% debt in Fitch's financial debt leverage ratio (FLR) calculation.
The new issue and the debt buy-back result in a net debt increase of around
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 '
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