(The following statement was released by the rating agency)
PARIS/LONDON, January 13 (Fitch) Fitch Ratings has assigned AXA
dated subordinated notes a 'BBB' rating.
KEY RATING DRIVERS
The notes are rated three notches below AXA's Issuer Default
Rating to reflect
their subordinated status, in line with Fitch standard notching
notes are issued by AXA under a EUR15bn Euro Medium Term Note
The proceeds will be used to refinance existing subordinated
debt maturing in
the coming 12 months.
The notes have contractual maturity in 2054 and are also
designed to be eligible
for regulatory treatment for the required solvency margin or as
Tier 2 (T2) own
funds following the implementation of Solvency 2.
Fitch regards this issuance as neutral to AXA's financial debt
capital adequacy, as the new notes are replacing existing debt.
The notes receive 100% equity credit in Fitch's internal
calculation based on regulatory override as eligible T2
instruments. Given the
optional redemption date, the notes are treated as 100% debt in
financial debt leverage calculation.
The issuance will lengthen the maturity profile of the group's
Moreover, in Fitch's view, this placement further underlines
flexibility, removing part of the 2014-2015 refinancing risk.
The debt rating is subject to the same rating factors that might
Long-Term Issuer Default Rating (IDR).
Factors that could lead to a rating downgrade for AXA include a
weakening of the
group's capital position or deterioration in profitability. This
would include a
sustained drop in regulatory capital to below 170% of regulatory
earnings volatility for a sustained period. In addition, the
ratings could be
downgraded if financial leverage increases above 30%, material
develop or if there is a weakening in the group's reserve
Fitch currently rates AXA as follows:
--Insurer Financial Strength Rating of core insurance entities:
--Issuer Default Rating of AXA S.A.: 'A'; Outlook Negative
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Additional information is available at www.fitchratings.com.
Applicable criteria, 'Insurance Rating Methodology', dated 13
November 2013, are
available at www.fitchratings.com.
Applicable Criteria and Related Research:
Insurance Rating Methodology -- Amended
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