OREANDA-NEWS. S&P Global Ratings today assigned its 'BBB' rating to U. K.-based insurer Aviva PLC's issuance of ?400 million of subordinated tier 2 debt from its ?7 billion program. The dated issue has a 33-year term and pays a fixed coupon until the first call date.

The rating reflects our standard notching for subordinated debt issues, which is two notches below the long-term counterparty credit rating on the issuer. We have analyzed and rated the debt issue on the basis that:The notes are subordinated to senior creditors; Interest deferral can occur at the option of the issuer; andInterest deferral is mandatory under certain circumstances linked to a regulatory solvency event. We classify the notes as having intermediate equity content under our hybrid capital criteria. We include securities such as these in total adjusted capital (TAC) up to a maximum of 25% of TAC, which is our measure of available capital in our consolidated risk-based capital analysis of insurance companies. Such inclusion is subject to the aggregate amount of included hybrid capital not exceeding the total eligible for regulatory solvency treatment.

Furthermore, we understand that the notes are callable in 2029, and on any interest payment date thereafter. Aviva PLC will pay a semi-annual fixed coupon until the first call date and on a quarterly basis thereafter. Aviva PLC has the option to redeem, exchange, or vary the terms of the notes under certain circumstances, including for regulatory or rating reasons.