Best’s News & Research Service - November 20, 2015 05:40 PM (EST)
A.M. Best Removes from Under Review and Downgrades Ratings of American Health and Life and Triton Insurance Company
Oldwick //BestWire// - A.M. Best has removed from under review with negative implications and downgraded the financial strength rating (FSR) to B (Fair) from A- (Excellent) and the issuer credit rating (ICR) to “bb+” from “a-” of American Health and Life Insurance Company (AHLIC). Additionally, A.M. Best has removed from under review with negative implications and downgraded the FSR to B (Fair) from A (Excellent) and the ICR to “bb+” from “a” of Triton Insurance Company (Triton). Both companies are domiciled in Fort Worth, TX. The outlook assigned to all ratings is stable.
Concurrently, A.M. Best has affirmed the FSR of B (Fair) and ICR of “bb+” of Merit Life Insurance Co. (Merit Life). The ratings of Yosemite Insurance Company remain unchanged. Both entities are domiciled in Evansville, IN. The outlook for both ratings is stable.
The rating actions follow the completion of OneMain Financial Holdings, Inc.’s (OneMain) previously announced acquisition of these companies from CitiFinancial Credit Company, a wholly-owned subsidiary of Citigroup Inc. [NYSE: C], for approximately $4.5 billion. All entities are now indirectly owned by OneMain (formerly Springleaf Holdings, Inc).
The ratings downgrade of AHLIC and Triton reflects the less creditworthy risk profile of their new parent, a below investment grade consumer finance company whose operating flexibility and business profile had been challenged by the credit crisis and the subsequent difficult macroeconomic environment. The ratings of all insurance entities within the group now reflect the drag of their immediate parent, OneMain. A.M. Best notes that OneMain has made progress in recent periods in repaying near-term debt and improving its liquidity, as well as improving operating performance. In addition, the new acquisition will strengthen OneMain’s business profile while adding scale and expense efficiencies. The insurance entities will be closely monitored by A.M. Best for any impact from OneMain’s financial condition, notably its ability to meet upcoming debt maturities.
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.
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