2008-04-16 23:34:31 -
- Fitch has downgraded the Insurer Financial Strength ratings of Alfa Group to 'A' from 'AA-' following the close of Alfa's privatization transaction. In addition, Alfa Corporation's Issuer Default Rating was downgraded to 'BBB+' from 'A-' and the commercial paper rating was downgraded to 'F2' from 'F1'. The Rating Outlook is Stable for all ratings. Fitch is also withdrawing the
ratings due to diminished market interest.
In the privatization transaction, Alfa Mutual Group purchased the 45% share of Alfa Corp. stock that it did not own. The transaction closed on April 15, 2008 at a total cost of $876 million. Following the transaction, Alfa Group's Prism capital model score fell to the 'A' level from the 'AAA' level, eliminating Alfa Group's over capitalized position. In the past, Alfa Group's strong capitalization as measured by absolute dollar, risk-adjusted and operating leverage ratio has historically contributed heavily to its ratings.
Fitch has downgraded the following ratings:
Alfa Corporation
--Issuer Default Rating to 'BBB+' from 'A';
--Commercial paper to 'F2' from 'F1';
--$70 million variable-rate note due June 1, 2017 to 'BBB' from 'A-'.
The insurer financial strength ratings of the following entities were downgraded to 'A' from 'AA-':
--Alfa Insurance Corporation
--Alfa General Insurance Corporation
--Alfa Mutual Fire Insurance Company
--Alfa Mutual General Insurance Company
--Alfa Mutual Insurance Company
--Alfa Specialty Insurance Corporation
--Alfa Alliance Insurance Corporation
--Alfa Life Insurance Corporation
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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 Ratings, Chicago
Douglas M. Pawlowski, CFA, 312-368-2054
Gerald B. Glombicki, 312-606-2354
or
Media Relations:
Kenneth Reed, 212-908-0540, New York
