Rating agency Standards & Poor's (S&P) has assigned an A rating to the proposed subordinated perpetual notes to be issued by Zurich Finance (UK) plc, a newly-formed subsidiary of Zurich Financial Services.
The issue, whose amount is yet to be confirmed, will be guaranteed by Zurich Insurance Co.
S&P analyst Karin Clemens said: "Subject to the 15% hybrid equity ratio limit, Standard & Poor's will treat the capital raised from this issue as hybrid equity. The proceeds from the bond will be partly used to pay down existing third-party high-coupon senior debt of the Zurich group.
"Standard & Poor's considers that the notes will form part of the Zurich group's long-term capital structure, and that any refinancing would be achieved through an issue of similar or better equity-like characteristics."
