KEY RATING DRIVERS
Fitch placed Wilton Re on Rating Watch Positive on
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.
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 Life Company of
--IFS to 'A+' from 'A'; Outlook Stable.
--Long-term IDR to 'A-' from 'BBB+'; Outlook Stable.
--5.875% senior notes due
Additional information is available at 'www.fitchratings.com'.
--'Insurance Rating Methodology', dated
Insurance Rating Methodology
Source: Fitch Ratings
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