Scope assigns instrument rating of (P)BB to subordinated (hybrid) notes of Ilija Batljan Invest AB
The latest information on the rating, including rating reports and related methodologies, is available on this LINK.
Scope Ratings GmbH (Scope) has today assigned a subordinated debt (hybrid) rating of BB and an instrument rating of (P)BB to the subordinated perpetual floating rate callable capital notes to be issued by Ilija Batljan Invest AB.
IB invest AB intends to issue SEK 500m in subordinated perpetual floating rate callable capital notes (subordinated hybrid instrument; ISIN SE0016101638) with the option to tap to a maximum of SEK 750m in total. Scope has assessed the characteristics of the instrument, which include a deep subordination, ranking only ahead of common equity; deferrable interest at the sole discretion of the issuer with a cumulation built in; the intention to replace the instrument with a similar instrument if needed; and, in Scope’s view, a sufficiently long remaining maturity with the first material step-up after 25 years.
Given the above characteristics, Scope has assigned a 50% equity content to the notes, in line with its issuer rating assumption. For further information on the rating drivers for the issuer rating (BBB-/Stable)1, please refer to the rating action release published on 28 May 2021.
Scope rates the subordinated perpetual floating rate callable capital notes to be issued at (P)BB, two notches below the issuer rating of Ilija Batljan invest AB. This is due to the contractually deeply subordinated and hybrid characteristics of the notes.
The rating on the subordinated perpetual floating rate callable capital notes (subordinated hybrid instrument) is preliminary until the instrument has been issued.
Rating driver references
1. Issuer rating action release
Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.
The methodology used for this Credit Rating and/or Outlook, (Corporate Rating Methodology, 26 February 2020), is available on https://www.scoperatings.com/#!methodology/list.
Scope Ratings GmbH and Scope Ratings UK Limited apply the same methodologies/models and key rating assumptions for their credit rating services, while Scope Hamburg GmbH’s methodologies/models and key rating assumptions are different from those of Scope Ratings GmbH and Scope Ratings UK Limited.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on https://www.scoperatings.com/#!governance-and-policies/rating-scale. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at https://www.scoperatings.com/#governance-and-policies/regulatory-ESMA. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at https://www.scoperatings.com/#governance-and-policies/rating-scale. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on https://www.scoperatings.com/#!methodology/list.
The Outlook indicates the most likely direction of the Credit Rating if the Credit Rating were to change within the next 12 to 18 months.
Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Rating: public domain, the Rated Entity, the Rated Entities' Related Third Parties, third parties and Scope Ratings' internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting the Credit Rating originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Rating and/or Outlook and the principal grounds on which the Credit Rating and/or Outlook are based. Following that review, the Credit Rating was not amended before being issued.
This Credit Rating and/or Outlook is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Rating and/or Outlook is UK-endorsed.
Lead analyst: Thomas Faeh, Executive Director
Person responsible for approval of the Credit Rating: Olaf Tölke, Managing Director
The Credit Rating/Outlook was first released by Scope Ratings on 1 June 2021.
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