Fitch Ratings has assigned the Society of Lloyd's hybrid issue expected 'A-' rating
Fitch Ratings has assigned the Society of Lloyd's ("Lloyd's", 'A'/Stable Outlook) issue of perpetual subordinated capital securities an expected rating of 'A-' (A minus).
Fitch has attributed equity credit of 75% to the securities under its hybrid assessment methodology. The final rating is contingent on the receipt of final documents conforming to information already received.
The rating of 'A-' (A minus) is in line with Fitch's rating of Lloyd's existing subordinated debt issued in 2004 and is consistent with the agency's standard notching for subordinated debt of one notch below Lloyd's Issuer Default Rating of 'A'. The issue will replace existing syndicate loans of GBP335m in Lloyd's capital structure. It is intended that the restructuring will provide a more stable capital base for Lloyd's and reduce the opportunity cost of mutuality for members. As the issue benefits from 75% equity credit, its replacement of existing loans has a mildly positive benefit on Fitch's assessment of Lloyd's capitalization and leverage.
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