News Column

Fitch Upgrades Wilton Re's Ratings; Outlook Stable

July 1, 2014

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has upgraded the Insurer Financial Strength (IFS) ratings of Wilton Reassurance Company, Wilton Reinsurance Bermuda Limited, Wilton Reassurance Life Company of New York and Texas Life Insurance Company (collectively referred to as Wilton Re) to 'A+' from 'A' as well as the long-term Issuer Default Rating (IDR) of Wilton Re Holdings Limited to 'A-' from 'BBB+'. The Rating Outlook is Stable.

KEY RATING DRIVERS

Fitch placed Wilton Re on Rating Watch Positive on March 21, 2014, following the company's announcement that Canada Pension Plan Investment Board (CPPIB) would be acquiring the stock of Wilton Re Holdings Limited, the privately held holding company which owns Wilton Re. The transaction closed yesterday.

Fitch views the transaction as a credit positive for Wilton Re since it removes uncertainty regarding the long-term ownership structure of the company and improves the company's financial flexibility. Based on the application of Fitch's group rating methodology, the agency classifies Wilton Re as a non-core subsidiary of CPPIB; however, Fitch notes that CPPIB views the U.S. life insurance market as a long-term investment opportunity. Fitch expects Wilton Re will continue its strategic focus on U.S. life insurance and its disciplined approach toward new business opportunities which has resulted in its strong operating performance.

RATING SENSITIVITIES

Fitch considers an upgrade of Wilton Re's ratings in the near to intermediate term unlikely.

Key rating triggers for Wilton Re's ratings that could lead to a negative rating action include:

--A financial leverage increase above 25%;

--Large transactions outside the company's historical risk preference or expertise or any other material changes in risk appetite for the company;

--A sustained drop in the company's risk-adjusted capital position with no plans or ability to rectify;

--A decline in GAAP operating ROE below 10%.

Fitch has upgraded the following ratings:

Wilton Reassurance Company

Wilton Reinsurance Bermuda Limited

Wilton Reassurance Life Company of New York

Texas Life Insurance Company

--IFS to 'A+' from 'A'; Outlook Stable.

Wilton Re Holdings Limited

--Long-term IDR to 'A-' from 'BBB+'; Outlook Stable.

Wilton Re Finance LLC

--5.875% senior notes due March 30, 2033 to 'BBB+' from 'BBB'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Insurance Rating Methodology', dated Nov. 13, 2013.

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=723072

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=837496

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Tana M. Higman

Director

+1-312-368-3122

Fitch Ratings, Inc.

70 W. Madison Street

Chicago, IL 60602

or

Secondary Analyst

Douglas L. Meyer, CFA

Managing Director

+1-312-368-2061

or

Committee Chairperson

Martha M. Butler, CFA

Senior Director

+1-312-368-3191

or

Media Relations:

Brian Bertsch, +1-212-908-0549 (New York)

brian.bertsch@fitchratings.com


Source: Fitch Ratings


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