Fitch Ratings reiterated the long term Issuer Defaults Rating
("IDR") at 'A+' of
). The rating agency also affirmed the senior unsecured debt
ratings at 'A+.' The outlook remains stable.
The rating affirmations came on the back of its solid credit
portfolio, supported by huge dividend payments from the
subsidiaries, considerable cash and investments as well as its
equity value in its subsidiaries.
Loews is expected to receive a dividend of $600 million from three
of the largest subsidiaries, which is almost the same as it
received in 2011. Also, this amount exceeds the amount spent by the
company under the heads of operating expenses, interest and
Fitch also noted that Loews' holding-company structure safeguards
noteholders from operating and legal risks at the subsidiary level,
while at the same time it continues to receive dividends. Loews
also does not guarantee debt at the subsidiaries.
Loews continues to possess a solid liquidity based on its cash and
investments, dividend received from subsidiaries and its capability
to liquidate a portion of its equity affiliate investments as per
requirement.. Also, Loews also does not have any debt maturing in
the near term; its next maturity is scheduled for March 2016.
However, downside risks to the rating stems from erosion in credit
quality of the subsidiaries or huge capital requirements. Also,
modification in the use of the Loews' balance sheet could act a
We believe the company's strong ratings scores will help retain
investor confidence and help it to write more businesses going
forward, thereby improving the results.
We retain our Outperform recommendation on Loews Corporation. The
quantitative Zacks #1 Rank (short term Strong Buy rating) for the
company indicates a boost on the stock over the near term.
Headquartered in New York, Loews Corporation is a diversified
holding company. The company's principal subsidiaries are
CNA Financial Corporation
Diamond Offshore Drilling Inc.
), Boardwalk Pipeline Partners LP, Loews Hotels Holding Corporation
and HighMount Exploration & Production LLC.
CNA FINL CORP (CNA): Free Stock Analysis Report
DIAMOND OFFSHOR (DO): Free Stock Analysis
LOEWS CORP (L): Free Stock Analysis Report
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