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FOR IMMEDIATE RELEASE
OLDWICK - APRIL 15, 2014 10:40 AM (EDT)
A.M. Best has commented that the ratings for Teachers Insurance and Annuity Association of America (TIAA) and its wholly owned insurance operating subsidiary, TIAA-CREF Life Insurance Company (both domiciled in New York, NY) remain unchanged following TIAA's recent announcement that it intends to acquire Nuveen Investments (Nuveen), a diversified investment management company with approximately $221 billion in assets under management.
TIAA is acquiring Nuveen from an investor group led by Madison Dearborn Partners, a private equity investment firm, for an enterprise value of $6.25 billion, inclusive of Nuveen's outstanding debt. Nuveen will operate as a subsidiary of TIAA, retaining its current multi-boutique business model and continuing to support its investment affiliates through scaled distribution, marketing and administrative services.
The acquisition will add further scale to TIAA's existing asset management business and expands the products and services available to its customers. Additionally, the transaction adds diversification to its current investment and distribution platform. The addition of Nuveen will bring the group's total assets under management to approximately $800 billion.
Following the transaction, A.M. Best expects TIAA to remain adequately capitalized for its current ratings. A.M. Best will be monitoring the integration process, along with the impact on TIAA's operating results, risk-adjusted capital and financial leverage once the details about the structure of the acquisition are finalized. If the transaction is deemed to impact TIAA's financial flexibility or risk-adjusted capital metrics beyond A.M. Best's expectations, then negative rating pressure could result.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.