NEW YORK--(BUSINESS WIRE)--
Fitch Ratings has placed the 'A-' Insurer Financial Strength (IFS) rating of Lincoln Benefit Life Ins. Co. (Lincoln Benefit) on Rating Watch Negative following its announced sale to Resolution Life Holdings, Inc. Lincoln Benefit is a subsidiary of Allstate Life Insurance Co. and ultimate parent, The Allstate Corporation (Allstate). The sale of Lincoln Benefit coincides with the decision by Allstate to exit the independent agency distribution channel for life and annuity products. This rating action has no impact on the ratings of Allstate or its other rated subsidiaries. A complete list of ratings follows at the end of this press release.
KEY RATING DRIVERS
Today's rating action reflects Fitch's expectation that Lincoln Benefit's rating will no longer receive support from its parent. Per Fitch's criteria, when an insurance organization announces that it has reached an agreement to sell a previously supported entity, and the buyer is identified, Fitch will generally place the entity's rating on Rating Watch. Fitch expects Lincoln Benefit to be managed in runoff mode following its acquisition and has thus assigned a Negative indicator to the Rating Watch. The transaction in expected to close in the fourth quarter of 2013 pending regulatory approvals.
Resolution Life is a Delaware company set up by a UK 'aggregator' of life businesses and is not currently rated by Fitch. Lincoln Benefit will reportedly be the group's first foray into the U.S. Lincoln Benefit was Allstate's independent agent channel for life and annuity and represents about 15% of the life organization's total premium and contract charges.
Downgrade Triggers: Upon close of the transaction, Fitch will resolve the Rating Watch and base its rating on an assessment of Lincoln Benefit's post-close credit profile as well as any impact from its new parent, Resolution Life. Fitch typically rates run-off companies no higher than 'BBB'.
Potential Withdrawal: If, upon closing, Fitch cannot assess the creditworthiness of the buyer or its plans for Lincoln Benefit, it may withdraw the rating at its pre-existing level.
Fitch Places the following rating on Rating Watch Negative:
Lincoln Benefit Life Insurance Co.
The following ratings are unaffected by this rating action. The Outlook for all ratings is Stable:
The Allstate Corporation
--Long-term IDR 'A-'.
Junior subordinated debt 'BBB-':
--6.125% $500 million debenture due May 15, 2037;
--5.10% $500 million subordinated debenture due Jan. 15, 2053;
--6.5% $263 million debenture due May 15, 2067.
Senior unsecured debt 'BBB+':
--7.5% $250 million debenture due June 15, 2013;
--6.2% $300 million debenture due 2014;
--5% $650 million note due Aug. 15, 2014;
--6.75% $177 million debenture due May 15, 2018;
--7.45% $325 million debenture due 2019;
--6.125% $160 million note due Dec. 15, 2032;
--5.35% $323 million note due June 1, 2033;
--5.55% $563 million note due May 9, 2035;
--5.95% $405 million note due April 1, 2036;
--6.9% $165 million debenture due May 15, 2038;
--5.2% $88 million note due Jan. 15, 2042.
--Commercial paper at 'F1';
--Short-term IDR at 'F1'.
Allstate Insurance Company
Allstate County Mutual Insurance Co.
Allstate Indemnity Co.
Allstate Property & Casualty Insurance Co.
Allstate Texas Lloyd's
Allstate Vehicle and Property Insurance Co.
Encompass Home and Auto Insurance Co.
Encompass Independent Insurance Co.
Encompass Insurance Company of America
Encompass Insurance Company of Massachusetts
Encompass Property and Casualty Co.
--IFS at 'A+'.
Allstate Life Insurance Co.
Allstate Life Insurance Co. of NY
American Heritage Life Insurance Co.
Allstate Life Global Funding Trusts Program
--The following medium-term notes at 'A-'.
--$85 million note due Nov. 25, 2016.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Insurance Rating Methodology' (Jan. 11, 2013).
Applicable Criteria and Related Research:
Insurance Rating Methodology - Amended
- Security Upgrades & Downgrades
- Fitch Ratings
- The Allstate Corporation
Cynthia J. Crosson
Fitch Ratings, Inc.
One State Street Plaza
New York, New York 10004
Douglas M. Pawlowski, CFA
Julie A. Burke, CPA, CFA
Brian Bertsch, +1-212-908-0549 (New York)