S&P rates Total notes A-

S&P said it assigned an A- long-term issue rating to the proposed undated perpetual, deeply subordinated, fixed-rate, resettable notes due to be issued by Total SA.

The agency said it classifies the proposed securities as having intermediate equity content until their first call dates because of their subordination, permanence and optional deferability during this period.

The completion and size of the issue will be subject to market conditions, S&P said, but it is expected to be of benchmark size.

These hybrids will help mitigate further deterioration in the adjusted debt metrics in 2016, the agency said.

The two-notch difference between the A- rating on the proposed hybrid notes and the A+ corporate credit rating on Total reflects one notch for the proposed notes' subordination because Total has an investment grade rating, S&P said, and an additional notch for the optional deferability of interest.

The ratings also reflect a belief that there is a relatively low likelihood that Total will defer interest payments, the agency added.

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