S&P rates Mizuho bonds A

Standard & Poor's said it assigned its A long-term issue credit rating to the $1.5 billion 4.2% subordinated bonds due 2022 issued by Mizuho Financial Group (Cayman) 2 Ltd.

The agency said the issue credit rating on the subordinated bonds relies on the credit quality of Mizuho Corporate Bank Ltd., which is a core subsidiary of Mizuho's parent Mizuho Financial Group Inc.

The agency said the rating on the bonds is one notch lower than the long-term counterparty credit rating on Mizuho Corporate Bank because the bonds are traditional Tier 2 capital, which is not assigned a trigger clause that fulfills the requirements to be included in the Tier 2 capital set under the Basel III regulatory framework.

Another reason for the one-notch gap is its subordination to senior creditors in the event of liquidation, S&P said.

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