Fitch rates Aviva's CA$450m Tier 3 bonds at 'BBB+'

Fitch Ratings has attached a ‘BBB+’ rating to insurance giant Aviva’s CA$450m of Tier 3 subordinated notes, the proceeds of which are being used to part-fund Aviva Canada’s buy of RBC General Insurance Company.

Fitch rated the notes three notches below Aviva’s long-term issuer default rating, in line with its notching criteria.

The securities carry a coupon of 4.5% and have a five-year maturity. They rank senior to existing Tier 2 capital, Tier 1 capital and all classes of share capital of the issuer.

Fitch said it expected this issue to have a negligible effect on Aviva's financial leverage and fixed-charge coverage.

Aviva Canada is buying RBC General Insurance for CA$582m. The deal was announced in January.