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Fitch Upgrades Protective Life Corporation Ratings; Watch Negative

Fitch Ratings has upgraded the ratings of Protective Life Corp.'s (NYSE: PL) Issuer Default Rating (IDR) to 'A-' from 'BBB+' and its senior debt ratings to 'BBB+' from 'BBB'. At the same time, Fitch has upgraded PL's primary life insurance subsidiaries' Insurer Financial Strength (IFS) to 'A+' from 'A'. Fitch has also placed the ratings on Rating Watch Negative. A full list of ratings follows at the end of this release.

KEY RATING DRIVERS

On Feb. 1, 2015, Protective Life Corporation (PL) was acquired by Japan-based Dai-ichi Life Insurance Company, Ltd. (Dai-ichi Life). PL's ratings were upgraded and the Rating Watch was established to be aligned with the ratings and Rating Watch status of Dai-ichi Life based on Fitch's criteria. Dai-ichi Life is the second largest life insurance company in Japan and ranks as one of the largest life insurers globally.

The transaction reflects a broader strategic initiative by Dai-ichi Life to expand its life insurance business outside of Japan. The acquisition of PL represents Dai-ichi Life's first acquisition in the U.S. life insurance market. Fitch anticipates relatively low integration risk, as PL's existing management team and operating strategy will largely remain in place.

The Rating Watch Negative status reflects Dai-ichi Life's exposure to Japan sovereign risk (see 'Fitch Places Japan's 'A+' IDRs on Rating Watch Negative' dated Dec. 9, 2014 at www.fitchratings.com). Fitch expects to resolve the Rating Watch Negative on Japan during the first half of 2015.

PL's ratings continue to reflect its strong operating performance, improving debt service capability and low investment risk. While PL's risk-adjusted capitalization remains in line with rating expectations, its ratings also reflect the company's relatively high total leverage driven by reserve funding arrangements.

Fitch's standalone assessment of PL's operations is an 'A' IFS rating and its strategic importance within the Dai-chi Life enterprise is considered 'Very Important.' The strategic category reflects Dai-ichi Life's initiative to expand into the U.S. life insurance market. PL's ratings benefit from greater resources and the stronger credit profile of Dai-ichi Life. As such, the PL entities receive a one-notch uplift and have been assigned the group rating.

RATING SENSITIVITIES

With PL currently rated at Japan's Long-Term Local-Currency IDR, an upgrade is unlikely in the near future.

Conversely, if the rating on Japan were lowered, PL's ratings will also likely be lowered in conjunction with its parent.

Fitch has upgraded the following ratings and revised the Rating Watch to Negative from Positive:

Protective Life Corporation

--IDR to 'A-' from 'BBB+';

--$150 million of 6.40% senior notes due 2018 to 'BBB+' from 'BBB';

--$400 million of 7.38% senior notes due 2019 to 'BBB+' from 'BBB';

--$300 million of 8.45% senior notes due 2039 to 'BBB+' from 'BBB';

--$288 million of 6.25% subordinated debt due 2042 to 'BBB-' from 'BB+';

--$150 million of 6.00% subordinated debt due 2042 to 'BBB-' from 'BB+'.

PLC Capital Trust V

--$103 million of 6.13% trust-preferred stock due 2034 to 'BBB-' from 'BB+'.

Protective Life Insurance Company

Protective Life and Annuity Insurance Company

West Coast Life Insurance Company

MONY Life Insurance Co.

--IFS to 'A+' from 'A'.

Additional information is available 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--Insurance Rating Methodology' (September 2014).

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=756650

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=979012

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts:

Fitch Ratings
Primary Analyst
Dafina M. Dunmore, CFA
Director
+1-312-368-3136
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Douglas L. Meyer, CFA
Managing Director
+1-312-368-2061
or
Committee Chairperson
Julie A. Burke, CPA, CFA
Managing Director
+1-312-368-3158
or
Media Relations:
Alyssa Castelli, New York, +1 212-908-0540
Email: alyssa.castelli@fitchratings.com
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com

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