S&P Affirms Protective Life (PL) at CreditWatch Negative

Standard & Poor's Ratings Services said that its 'A-' long-term counterparty credit rating on Protective Life Corp. (NYSE: PL) remains on CreditWatch Negative, where it was initially placed June 4, 2014.

The original action followed the announcement by The Dai-ichi Life Insurance Co. Ltd. (Dai-ichi) that it plans to acquire PLC. We expect the transaction to close around Dec. 31, 2014, pending the PLC shareholder and certain other regulatory approvals. Dai-ichi has successfully raised equity partially to fund the acquisition.

"We expect to resolve the CreditWatch listing after PLC's shareholders approve the take-over bid from Dai-ichi, and after we fully assess Dai-ichi's prospective capital plan for PLC and regulatory constraints to capital distribution out of the U.S. operating companies," said Standard & Poor's credit analyst Shellie Stoddard. We could affirm the ratings if we determine that PLC will maintain the stand-alone credit profile of its operating companies and there are provisions to ensure capital maintenance commensurate with 'AA' targets. In the absence of adequate protection and intent to maintain the current capital levels at PLC, we could lower the ratings to the level of the combined group (the financial strength ratings for Dai-ichi and PLC's operating companies would be the same). The ratings on PLC will remain three notches lower than our financial strength rating on Protective Life Insurance Co.

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