Moody’s assigns ICBC preference shares Ba1

Moody’s Investors Service said it assigned a Ba1(hyb) foreign-currency rating to the proposed dollar-denominated additional tier 1 capital qualifying offshore preference shares to be issued by Industrial & Commercial Bank of China Ltd.

“The Ba1(hyb) rating is three notches below ICBC’s adjusted baseline credit assessment, reflecting the structure of the proposed issuance and Moody’s assumption that investors of these securities face the risk of full or partial compulsory conversion of the offshore preference shares into ICBC’s H shares common stock upon the occurrence of the relevant trigger event,” Moody’s said in a press release.

The rating also considers the cancellation of dividends, which could occur before a point of non-viability, Moody’s said.

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