SRLEV non è al sicuro
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The hybrid bonds SRLEV, the insurance arm of SNS (SR.AE), may still be affected by two setbacks in the short term, Moody's warned Tuesday. The rating agency expects in those cases only limited losses.
The first possible drawback is that the European Commission imposes a postponement of interest payments, because the insurance indirectly share the benefits of the nationalization and in the context of 'burden sharing' should share in the costs.
With the nationalization were only subordinated bondholders of SNS Bank and SNS holding expropriated and remained that of SRLEV outside shot.
The European Commission (EC) Thursday will be expected to give preliminary approval to the nationalization of 1 February.
Less likely calls Moody's the possibility that the Dutch government enforces a debt swap, as happened with the nationalization of ASR, the former Fortis Insurance. Institutional investors were forced to a quarter of the value return through an exchange of securities.
A third option is that the EC SNS prohibits the hybrid SRLEV bonds to be redeemed at the next opportunity. It is a hybrid bond of EUR400 million, maturing in 2041 and interim maturity date in 2021, and a perpetual of CHF105 million with a maturity date in mid 2016.
The rating agency also outlines three future scenarios for the financial group SNS.
In the former, life insurance and pension company Swiss Life sold separately. This would be negative for SRLEV bonds, because a weakened insurance arm would remain. Partial sale of the insurance may be a requirement of the European Commission, says Moody's.
In the second scenario, the entire insurance business was separated from the under-capitalized banking division and later sold. This is beneficial for the credit. A merger with other state insurer ASR would also be good for the bondholders, set the security's MOODY analysts. One problem is that the double leverage in the financial group must first be repaid so that in this scenario, additional capital is needed.
In the third scenario, SNS bank-insurer, without the real estate. This would be negative for the creditworthiness of the SRLEV bonds, says Moody's, due to the risk profile of the bank, although it is expected to improve.