Dutch-based holding company ASR Nederland N.V. is issuing notes that will be eligible as Restricted Tier 1 (RT1) capital under Solvency II.
Dutch-based holding company ASR Nederland N.V. is issuing notes that will be eligible as Restricted Tier 1 (RT1) capital under Solvency II. We are assigning our 'BB' issue rating to the RT1 notes. We expect to classify the bonds as having intermediate equity content. The rating on the bonds is four notches below the long-term issuer credit rating (ICR) on ASR Nederland N.V. (BBB+/Stable/--); one notch to reflect the notes' subordinated status to senior bondholders, one notch to reflect the risk of potential conversion to equity and loss of principal, and two notches to reflect the mandatory and optional interest cancellation features. The notching on this instrument is wider than that applied for ASR Group's other subordinated instruments as we think the various mandatory coupon cancellation triggers of the RT1 notes create an increased risk of coupon nonpayment on a going-concern basis and we also consider the potential loss of principal for noteho