Fitch assigns an 'A+' long-term rating to the $450 million of 8.95% Enhanced Trust Preferred Securities issued by BB&T Capital Trust V, a Delaware statutory trust. The trust will invest the proceeds of the capital securities in junior subordinated deferrable interest debentures of BB&T Corporation (BB&T). The securities qualify as Tier 1 Capital under U.S. banking regulatory guidance.
Based upon Fitch's hybrid capital rating criteria, the Enhanced Trust Preferred Securities have a high equity component. Fitch has assigned Class D equity treatment to the issuance (75% equity, 25% debt). The equity credit classification recognizes the securities' junior subordinated ranking, as these securities rank junior to all senior and subordinated obligations of BB&T and pari passu with existing junior subordinated debt. The securities have an initial maturity of September 2063, which may be extended to September 2068.
Interest is optionally deferrable for up to 5 years. If deferred, interest is cumulative and subject to an alternative payment mechanism requiring commercially reasonable attempts to issue high equity content securities and use the proceeds to pay the interest, subject to limitations. The notes are redeemable on or after September 15, 2013, subject to regulatory approval, and at any time subject to additional selected constraints.
Fitch's rating criteria for assigning equity credit for hybrids, dated June 25, 2008, is available on Fitch's web site www.fitchratings.com under the title 'Equity Credit for Hybrids and Other Capital Securities'.
Ratings Assigned:
BB&T Capital Trust V
--Capital Securities 'A+'
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