Fitch Ratings announced that it has downgraded its long-term credit rating of ING Verzekeringen N.V.(INGV) to ‘A+’ from ‘AA-‘ and removed it from Rating Watch Negative. It also adjusted the ratings on the Group’s U.S. subsidiary companies to reflect the change.
“The downgrade reflects the weakening of the capital position as a result of the long-term decline in equity values over the last couple of years,” said Fitch. “At the same time, leverage has remained above the levels expected for ‘AA’ rated companies. The rating now has a Stable Outlook, reflecting the expectation that leverage will not change significantly in the near term.”
The bulletin noted that although the group’s operational performance has been quite good, it had been hit hard by the decline in equity values over the first nine months of last year that reduced shareholders’ equity by 4.8 billion Euros ($5.25 billion). While the fourth quarter saw some recovery, Fitch noted that “the equity markets remain volatile and this will continue to impact the capital position of the company. Leverage has risen over recent years and now stands at close to 40%, which is not consistent with a ‘AA’ rating.”
Fitch said that its rating “continues to emphasise the good financial
flexibility of INGV, solid earnings, global franchises and diversification, despite a continuing emphasis on the competitive Dutch markets, and strong operational and financial management.
It noted the following ratings developments for the company’s U.S. divisions :
— ING America Insurance Holdings, Inc.- Commercial paper lowered to ‘F1’ from ‘F1+’.
— Equitable of Iowa Companies, Inc.- Senior debt lowered to ‘A’ from ‘A+’ and removed from Rating Watch Negative; Preferred stock lowered to ‘A-‘ from ‘A’ and removed from Rating Watch Negative.
— Lion Connecticut Holdings, Inc.- Senior debt lowered to ‘A+’ from ‘AA-‘ and removed from Rating Watch Negative.
–ReliaStar Financial Corporation-Senior debt lowered to ‘A’ from ‘A+’ and removed from Rating Watch Negative ; Long term lowered to ‘A’ from ‘A+’ and removed from Rating Watch Negative.
— ReliaStar Financing I, II- Capital securities lowered to ‘A+’ from ‘AA-‘ and removed from Rating Watch Negative.
Fitch also noted that the ratings of Northern Life Insurance Company and First Golden American Life Insurance Company of New York have been withdrawn, “as these legal entities were consolidated into other legal entities in 2002.”
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