S&P lowered its long-term counterparty credit and insurer financial strength ratings on various operating entities of U.K.-based Royal & Sun Alliance Insurance Group PLC (RSA) to “A” from “A+” following a decline in the group’s capital adequacy. The outlook is negative.
At the same time, S&P lowered to “BBB+” from “A-” its junior subordinated debt rating on notes issued by RSA and guaranteed by Royal & Sun Alliance Insurance PLC (RSAIP; local currency “A”/Negative/—, foreign currency “A”/Negative/”A-2”), the main operating company of RSA. In addition, S&P lowered to “A-2” from “A-1” its short-term rating on RSAIP’s $1 billion CP program.
The ratings on RSA reflect the group’s excellent global market position in general insurance and an improving earnings outlook. Offsetting this, capitalization is not consistent with the ratings, and the group’s ability to secure external capital is restricted.
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