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Fitch Expects to Rate Great-West Lifeco's C$150 Million Perpetual Preferred Shares 'BBB+'

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings expects to assign the following rating to Great-West Lifeco's (TSE:GWO) planned issuance:

--C$150 million Series R, non-cumulative first preferred shares 'BBB+'.

GWO has offered the underwriters the option to buy an additional two million shares. If the option is fully exercised, the gross proceeds will be C$200 million. The offering is expected to close Oct. 11, 2012.

The new share's rating will be equivalent to the ratings on GWO's existing preferred shares. Under Fitch's hybrid methodology, GWO's non-cumulative preferred shares receive 100% equity credit. Fitch anticipates that the net proceeds will be used for general corporate purposes and to augment the company's current liquidity position.

At June 30, 2012 GWO's financial leverage was 22% and GAAP earnings-based interest and preferred dividend coverage was approximately 6 times (x). Pro forma financial leverage, including the C$200 million issuance of Series Q non-cumulative preferred shares in July 2012, remains unchanged at approximately 22%.

On June 25, 2012, Fitch affirmed all of its ratings for GWO and GWO's subsidiaries with a Stable Outlook.

Fitch currently rates the GWO entities as follows:

Great-West Lifeco, Inc.

--Long-term IDR 'A+';

--6.14% senior debentures due March 21, 2018 'A';

--4.65% senior debentures due Aug. 13, 2020 'A';

--6.74% senior debentures due Nov. 24, 2031 'A';

--6.67% senior debentures due March 21, 2033 'A';

--5.998% senior debentures due Nov. 16, 2039 'A';

--Series F, 5.9% non-cumulative first preferred shares 'BBB+';

--Series G, 5.2% non-cumulative first preferred shares 'BBB+';

--Series H, 4.85% non-cumulative first preferred shares'BBB+';

--Series I, 4.5% non-cumulative first preferred shares 'BBB+';

--Series J, 6% non-cumulative first preferred shares 'BBB+';

--Series L, 5.65% non-cumulative first preferred shares 'BBB+';

--Series M, 5.80% non-cumulative first preferred shares 'BBB+';

--Series N, 3.65% non-cumulative first preferred shares 'BBB+';

--Series P, 5.4% non-cumulative first preferred shares 'BBB+';

--Series Q, 5% non-cumulative first preferred shares 'BBB+.'

GWL&A Financial Corp.

--Long-term IDR 'A+'.

Canada Life Financial Corporation

--Long-term IDR 'A+'.

Great-West Life Assurance Company

--IFS 'AA';

--Long-term IDR 'AA-'.

Canada Life Assurance Company

--IFS 'AA';

--Long-term IDR 'AA-';

--6.4% subordinated debentures due Dec. 11, 2028 'A+'.

Great-West Life and Annuity Insurance Company

--IFS 'AA';

--Short-term IDR 'F1+';

--Commercial paper 'F1+'.

London Life Insurance Company;

First Great-West Life & Annuity Insurance Company

--IFS 'AA'.

Great-West Lifeco Finance (Delaware) LP

--5.691% subordinated debentures due 2067 'BBB+';

--7.127% subordinated debentures due 2068 'BBB+'.

Great-West Life & Annuity Insurance Capital, LP

--6.625% deferrable debentures due Nov. 15, 2034 'BBB+'.

Great-West Life & Annuity Insurance Capital, LP II

--7.153% subordinated debentures due 2046 'BBB+'.

Great-West Life Capital Trust

--Series A, 5.995% senior debentures due Dec. 31, 2052 'A'.

Canada Life Capital Trust

--Series B, 7.529% senior debentures due June 30, 2052 'A'.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Insurance Rating Methodology' (Sept. 19, 2012).

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=688011

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Fitch Ratings
Primary Analyst
Tana M. Higman, +1 312-368-3122
Director
Fitch, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
R. Andrew Davidson, CFA, +1 312-368-3144
Senior Director
or
Committee Chairperson
Douglas M. Pawlowski, CFA, +1 312-368-2054
Senior Director
or
Media Relations:
Brian Bertsch, +1 212-908-0549
Email: brian.bertsch@fitchratings.com

Source: Fitch Ratings