Fitch Places Symetra Life on Ratings Watch Negative; Affirms Holdco

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has placed the rating for Symetra Life Insurance Company (Insurer Financial Strength [IFS] 'A+') on Rating Watch Negative. At the same time, Fitch has affirmed the ratings for Symetra Financial Corp. (Symetra, Issuer Default Rating [IDR] 'A-') and maintained the Negative Outlook. A full list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The rating actions follow the announcement that Symetra has agreed to be acquired by Japan-based Sumitomo Life Insurance Company (Sumitomo Life) in a transaction valued at $3.8 billion. The transaction is expected to close in early 2016 subject to customary shareholder and regulatory approvals. Fitch rates Sumitomo Life's IFS 'A' with a Stable Outlook.

The transaction reflects a broader strategic initiative by Sumitomo Life to expand its life insurance business outside of Japan. The proposed acquisition of Symetra represents Sumitomo Life's first major overseas acquisition. Fitch expects Symetra's existing management team and operating strategies will largely remain in place following the close of the transaction.

RATING SENSITIVITIES

Fitch will evaluate the transaction upon its ultimate consummation and Symetra's ratings could change based on the following:

--Ultimate application of Fitch's group rating methodology, including the agency's view of Symetra's strategic importance to Sumitomo Life, and if Symetra's ratings should be aligned with those of Sumitomo Life upon close of the acquisition.

--Related to the above, resolution of whether it would be appropriate to apply the Japan sovereign-constraint currently impacting Sumitomo Life's IFS ratings by one notch to Symetra's IFS ratings, in context of the group rating methodology.

--Given Symetra's pre-existing Negative Outlook, Fitch will continue to monitor the stand-alone profile of Symetra, and should there be any further deterioration in Fitch's view of Symetra's standalone profile, that could result in a downgrade of Symetra's ratings. Any such rating action, however, would consider the likelihood and timing of the close of the acquisition by Sumitomo Life, and if that provided any mitigating factors in light of any expected application of group rating methodology. For further details on the standalone rating sensitivities see the Symetra release published on May 22, 2015.

Fitch has placed the following ratings on Rating Watch Negative

Symetra Life Insurance Company

--IFS at 'A+'.

First Symetra National Life Insurance Company of New York

--IFS at 'A+'.

Fitch has affirmed the following ratings with a Negative Outlook:

Symetra Financial Corp.

--IDR at 'A-';

--6.125% senior unsecured notes due April 1, 2016 at 'BBB+';

--4.25% senior unsecured notes due July 15, 2024 at 'BBB+';

--8.3% junior subordinated CENts due Oct. 15, 2067 at 'BBB-'.

Additional information is available on www.fitchratings.com.

Applicable Criteria

Insurance Rating Methodology (pub. 14 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=868367

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=989337

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=989337

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150811006392/en/

Fitch Ratings
Primary Analyst
Julie A. Burke, CPA, CFA
Managing Director
+1-312-368-3158
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Douglas Meyer, CFA
Managing Director
+1-312-368-2061
or
Committee Chairperson
Keith Buckley, CFA
Managing Director
+1-312-368-3211
or
Media relations
Alyssa Castelli, New York, +1 212-908-0540
[email protected]

Source: Fitch Ratings

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