S&P rates BT hybrids BB+

S&P said it assigned its BB+ issue rating to the €500 million junior subordinated hybrid securities to be issued by British Telecommunications plc, a wholly owned subsidiary of BT Group plc. “The rating reflects our notching for subordination and the risk of loss absorption or cash conservation. We assess the securities as having intermediate equity content until the first interest reset date,” said S&P in a press release.

BT views the securities' issuance as a strategic and prudent balance sheet strengthening tool to support its long-term issuer credit rating and senior creditors. “We understand that BT intends to maintain or replace these securities as a long-term form of capital on its balance sheet,” S&P said.

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