Standard and Poor's Ratings Services (S&P) recently assigned
a "BBB" rating on
Protective Life Corporation
) newly issued subordinated debt worth $150 million. Fitch Ratings
also provided a "BB+" rating on the debt, while Moody's rated it
"Baa3" with a stable outlook.
S&P has rated the subordinated debt two notches below
Protective Life's issuer credit rating as the debt is subordinate
to the company's senior debt and also bears a 5-year deferral
option. Concurrently, the rating agency affirmed its counterparty
credit rating for Protective Life at "A-" with a stable
Protective Life is issuing 6% subordinated debt worth $150
million due 2042 to redeem its outstanding callable hybrid capital
securities maturing on 2066. However, the debt issuance will not
increase the company's total debt and this prevented the assignment
of lower ratings on the debt.
Prior Rating Action
Earlier this week, Fitch had affirmed its commercial
mortgage-backed securities ("CMBS") primary servicer rating of
"CPS3+", master servicer rating of "CMS3", and special servicer
rating of "CSS3+" on Protective Life Insurance Company, an
operating subsidiary of Protective Life.
Previously, in May 2012, the rating agency affirmed the issuer
default rating of Protective Life Insurance Company at "BBB+" and
insurer financial strength rating at "A" with a stable outlook.
Rating affirmations or upgrades from credit rating agencies play
an important part in retaining investor confidence on the stock as
well as maintaining creditworthiness in the market. We
believe strong ratings scores will help it to write more businesses
going forward, thereby augmenting the results.
Protective Life's peer,
Reinsurance Group of America Inc.
) also witnessed rating affirmation from A.M. Best Co. earlier this
week. The rating agency affirmed the company's debt rating of
"bbb+" with a stable outlook. The rating follows the company's
recent issue of 6.2% fixed-to-floating subordinated debentures
worth $400 million, slated to mature in 2042.
Protective Life carries a Zacks #3 Rank, which translates into a
short-term Hold rating.
PROTECTIVE LIFE (PL): Free Stock Analysis
REINSURANCE GRP (RGA): Free Stock Analysis
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