OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has assigned a Long-Term Issue Credit Rating (Long-Term IR) of “a” to both the USD 300 million 4.047% senior unsecured notes due 2028 and the USD 500 million 4.581% senior unsecured notes due 2048 issued by Great-West Lifeco Finance 2018 LP, a subsidiary of Great-West Lifeco Inc. (Great-West Lifeco) (Winnipeg, Manitoba). In addition A.M. Best has assigned a Long-Term IR of “a” to the CAD 500 million 3.337% senior unsecured notes due 2028 issued by Great-West Lifeco. The outlook assigned to the Credit Ratings (ratings) is stable, and the existing ratings of Great-West Lifeco and its subsidiaries are unaffected.
The proceeds from the notes will be utilized to fund all or a portion of the company’s previously announced early redemption of Great-West Lifeco Finance (Delaware) LP II’s 7.127% $500 million subordinated debentures due 2068 and for general corporate purposes, which may include the redemption of other outstanding company debt. A.M. Best notes that Great-West Lifeco’s adjusted financial leverage is expected to remain below 25%, which is within A.M. Best’s guidelines to support the assigned rating. Additionally, Great-West Lifeco’s interest and fixed charge coverage ratios also are expected to remain within A.M. Best’s guidelines for its current rating level.
The rating reflects Great-West Lifeco’s very strong market position in its core business lines, its highly diversified earnings profile and strong financial flexibility. Great-West Lifeco has generated positive results from its diversified insurance, reinsurance and financial services operations. In the first quarter of 2018, the company continued to be profitable, driven by strong underlying business performance in all geographic segments and disciplined expense management. During this quarter, the company also maintained its strong capital position after transitioning to the Life Insurance Capital Adequacy Test (LICAT), the new regulatory capital adequacy measurement, with a ratio of 130%, which is above the company’s target range of 110% to 120%.
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