OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has assigned a debt rating of “bbb+” to the recently announced CAD 200 million 4.80% non-cumulative first preferred shares, Series R of Great-West Lifeco, Inc. (Great-West) (Winnipeg, Manitoba). The assigned outlook is stable, and the existing ratings of Great-West are unaffected.
The proceeds from the preferred share offering will be utilized for general corporate purposes by Great-West, including augmenting its liquidity position. While affording relatively high equity credit to the preferred share offering, A.M. Best notes that Great-West’s adjusted financial leverage is expected to remain in the 25% range, which is within the guidelines to support the assigned rating. Additionally, Great-West’s interest coverage and fixed charge coverage are expected to remain within A.M. Best’s expectations for its current rating level.
The rating reflects Great-West’s very strong market position in core business lines, its highly diversified earnings profile and excellent financial flexibility. Great-West’s diversified insurance, reinsurance and financial services operations along with its strong enterprise risk management capabilities have enabled it to manage through adverse economic conditions in recent years with only a modest impact to its overall performance and financial strength.
A.M. Best recognizes Great-West’s consolidated position as a market leader in the Canadian individual and group areas, with a superior market position in the wealth accumulation and protection segments, stable earnings contributions from its U.S. operations as it grows its retirement savings business and enhanced opportunities for further diversification derived from its international business segments. These factors have contributed to Great-West’s ability to service its debt. Additionally, Great-West maintains excellent liquidity supported by high quality investments and stable sources of earnings, resulting in its solid coverage ratios.
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.
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Source: A.M. Best Co.