Rating action follows AXA's plan to dispose units to SNS Reaal
Fitch Ratings has placed AXA Schade's and AXA Leven's 'AA' Insurer Financial Strength (IFS) ratings on rating watch negative following AXA's plan to dispose them to SNS Reaal Groep for EUR1.75bn in cash.
At the same time, Fitch has affirmed SNS Bank's ratings at Issuer Default 'A+', Short-term 'F1', Individual 'B' and Support '3'. The rating Outlook is Stable and the Support Rating Floor remains unchanged at 'BB+'.
The Rating Watch reflects Fitch's view that these companies' strategic importance to AXA has materially changed and that the implicit support they have benefited from so far will not exist upon disposal. Fitch will resolve the Rating Watch upon completion of the transaction, expected in Q407, and anticipates the IFS ratings of the companies to be downgraded to the single 'A' category and aligned with those of the acquirer's main insurance subsidiaries.
The sale of AXA's Dutch insurance activities includes former Winterthur and DBV Winterthur operations in the country. As a whole, these entities had total written premiums of around EUR1.6bn in 2006, mostly life insurance, and were profitable. Fitch expects the transaction to have a marginal positive effect on AXA's consolidated solvency.
