MELBOURNE (S&P Global Ratings) May 10, 2023--S&P Global Ratings today assigned its 'BBB-' rating to four outstanding hybrid notes issues of QBE Insurance Group Ltd. (QBE; A-/Stable/--; core operating entities A+/Stable/--). Details of the notes issues are as follows:
- US$400 million perpetual fixed-rate subordinated capital notes issued November 2017,
- US$400 million fixed-rate subordinated notes due 2043 issued November 2016,
- A$500m floating-rate subordinated notes due 2036 issued August 2020, and
- £400 million fixed-rate resetting subordinated notes due 2038 issued September 2021.
We rate the notes three notches below the issuer credit rating of 'A-', in recognition of (1) the subordination to higher ranking securities, (2) the deferability of coupon payments, and (3) the inclusion of a nonviability contingent capital clause.
Under our insurance hybrid criteria, we have assessed the notes to have intermediate equity content and, as such, they are included within our measure of total adjusted capital, subject to thresholds.
The perpetual capital notes meet regulatory eligibility for Additional Tier 1 (AT1) capital while the three subordinated notes issues meet eligibility for Tier 2 capital.
We view the notes to be supportive of the group's funding structure and neutral to the ratings, with QBE's key financial leverage and interest coverage ratios remaining comfortably within our tolerances.
- General Criteria: Hybrid Capital: Methodology And Assumptions, March 2, 2022
- General Criteria: Environmental, Social, And Governance Principles In Credit Ratings, Oct. 10, 2021
- Criteria | Insurance | General: Insurers Rating Methodology, July 1, 2019
- General Criteria: Group Rating Methodology, July 1, 2019
- Criteria | Insurance | General: Methodology: Mortgage Insurer Capital Adequacy, March 2, 2015
- General Criteria: Principles Of Credit Ratings, Feb. 16, 2011
- Criteria | Insurance | General: A New Level Of Enterprise Risk Management Analysis: Methodology For Assessing Insurers' Economic Capital Models, Jan. 24, 2011
- Criteria | Insurance | General: Refined Methodology And Assumptions For Analyzing Insurer Capital Adequacy Using The Risk-Based Insurance Capital Model, June 7, 2010
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Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.
|Primary Credit Analyst:||Michael J Vine, Melbourne + 61 3 9631 2013;|
|Secondary Contact:||Craig A Bennett, Melbourne + 61 3 9631 2197;|
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