Reacting to the recent announcement that ING had resumed talks to acquire Aetna’s international and financial services’ business, rating agency Standard & Poor’s issued a “CreditWatch with negative implications” for ING Groep N.V. and its insurance subsidiaries, including ING America Insurance Holdings and the Equitable of Iowa Companies. The Group’s banking operations were not affected.
While not a downgrade of ING’s very strong ratings, AA- for the most part, the announcement was a warning that S&P feels that coming so soon after the acquisition of ReliaStar this “second potential transaction represents a significant strain on both the financial and the management resources of ING.”
“The risk-adjusted capitalization of ING Insurance Group is projected to remain extremely strong following the ReliaStar and Potential Aetna purchases, but is expected to be materially lower than at year-end 1999,” said the announcement.
It noted, however, that in the long term the acquisitions could “have a positive impact on ING’s U.S. business position and earnings if the group can acquire and integrate both U.S. operations successfully, while maintaining acceptable balance sheet quality.”
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