Fitch assigns BBB+ ratings to Athora senior notes

Fitch Ratings has assigned Bermuda-based long term insurer Athora Holding Ltd.'s proposed senior notes a 'BBB+' rating.

The notes are rated one notch below Athora's 'A-' Long-Term Issuer Default Rating (IDR), to reflect their 'below average' recovery assumptions.

The net proceeds from the notes will be applied for general corporate purposes, which may include bank loan refinancing and acquisitions.

Fitch said the proposed senior notes will rank pari passu with all Athora's other senior debt. The securities are notched down once from Athora's IDR to reflect a 'below average' recovery assumption.

Fitch added: "We also regard non-performance risk as 'minimal', and no further notching is applied to the notes' rating."

Fitch said the proposed notes were expected to qualify as Tier 3 regulatory capital by the Bermuda Monetary Authority (BMA).

"The notes include language that requires the company to satisfy the BMA's enhanced capital requirement (ECR) at maturity," Fitch said. "If the ECR is not met, the principal is deferred at maturity until the ECR is satisfied, which could include replacing the notes with capital having equal or better capital treatment.

"Failure to repay the notes at maturity due to an ECR breach will not constitute an event of default under the indenture or a default of any kind and will not give holders of the notes any right to accelerate repayment."