Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
AND SCROLL DOWN!
By clicking “I AGREE” [at the end of this document],
you indicate that you understand and intend these terms and conditions to be
the legal equivalent of a signed, written contract and equally binding, and
that you accept such terms and conditions as a condition of viewing any and all
Moody’s information that becomes accessible to you [after clicking “I AGREE”] (the
“Information”). References herein to “Moody’s” include Moody’s
Corporation, Inc. and each of its subsidiaries and affiliates.
Terms of One-Time Website Use
you have entered into an express written contract with Moody’s to the contrary,
you agree that you have no right to use the Information in a commercial or
public setting and no right to copy it, save it, print it, sell it, or publish
or distribute any portion of it in any form.
acknowledge and agree that Moody’s credit ratings: (i) are current opinions of
the future relative creditworthiness of securities and address no other risk; and
(ii) are not statements of current
or historical fact or recommendations to purchase, hold or sell particular
securities. Moody’s credit ratings and
publications are not intended for retail investors, and it would be reckless
and inappropriate for retail investors to use Moody’s credit ratings and
publications when making an investment decision. No
warranty, express or implied, as the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any Moody’s credit
rating is given or made by Moody’s in any form whatsoever.
3. To the extent permitted by law, Moody’s and its directors,
officers, employees, representatives, licensors and suppliers disclaim
liability for: (i) any indirect, special, consequential, or incidental losses
or damages whatsoever arising from or in connection with use of the
Information; and (ii) any direct or compensatory damages caused to any person
or entity, including but not limited to by any negligence (but excluding fraud
or any other type of liability that by law cannot be excluded) on the part of
Moody’s or any of its directors, officers, employees, agents, representatives,
licensors or suppliers, arising from or in connection with use of the
4. You agree to read [and
be bound by] the more detailed disclosures regarding Moody’s ratings and the
limitations of Moody’s liability included in the Information.
5. You agree that any disputes relating to this agreement or your use of
the Information, whether sounding in contract, tort, statute or otherwise,
shall be governed by the laws of the State of New York and shall be subject to
the exclusive jurisdiction of the courts of the State of New York located in
the City and County of New York, Borough of Manhattan.
10 Oct 2005
MOODY'S AFFIRMS LINCOLN NATIONAL'S RATINGS (A3 SENIOR DEBT) AND PLACES JEFFERSON-PILOT'S RATINGS (A3 TRUST PREFERRED) ON REVIEW FOR POSSIBLE DOWNGRADE
RATING ACTIONS FOLLOW ANNOUNCED MERGER OF LINCOLN NATIONAL AND JEFFERSON-PILOT
New York, October 10, 2005 -- Moody's Investors Service today affirmed with a stable outlook the credit
ratings of Lincoln National Corporation (NYSE: LNC--senior
unsecured debt at A3) and its life insurance subsidiaries, with
one exception, as noted below. Moody's also placed
on review for possible downgrade the credit ratings of Jefferson-Pilot
Corporation (NYSE: JP--A3 trust preferred) and the
Aa2 insurance financial strength ratings of its life insurance subsidiaries.
These rating actions follow the announcement that Lincoln National and
Jefferson-Pilot have signed a definitive merger agreement valued
at approximately $7.5 billion. The transaction is
expected to close in early 2006 subject to the required approvals.
Moody's said that the transaction is to be financed with a combination
of Lincoln National common stock and cash, which is likely to be
funded with debt and/or hybrid securities. The transaction will
unite two of the larger publicly-held life insurers in the U.S.
and will result in the combined entity being one of the largest and most
diversified U.S. life insurers. According to the
rating agency, the combined organization should benefit from its
greater diversification and larger scale in the following areas:
broader product offering, wider and deeper distribution penetration,
improved earnings stability and earnings diversification, and expense
However, the rating agency commented that Lincoln National's
ratings have been affirmed because the positive strategic effects of the
combination are expected to be largely offset by the negative financial
aspects of the transaction--the primary one being the anticipated
debt and/or hybrid issuance to partially finance the transaction.
In addition, the transaction may cause disruption in both organizations
during the period in which the transaction is pending and while the integration
is being executed, although both organizations have historically
integrated businesses successfully.
Commenting further, Moody's said that financial leverage is
expected to continue to be managed at its current level, which is
in line with Lincoln National's existing ratings and its peers.
However, holding company cash coverage of interest and dividends
post-merger, while expected to improve modestly from its
current level, is anticipated to remain relatively low for Lincoln
National's rating level. Moody's added that unless
the company demonstrates that it can drive further improvement in its
cash coverage over the next year, ratings pressure is likely to
Moody's explained that it placed Jefferson-Pilot's
ratings on review for possible downgrade in recognition that, after
the transaction closes, it will no longer benefit as much from its
historically strong holding company cash coverage ratios and capital levels,
because the combined group is expected to be managed consistently across
the operating companies. The review will focus on the necessary
approvals required for the closing of the transaction, upon which
the ratings of Jefferson-Pilot are expected to be downgraded by
one notch, to be consistent with Lincoln National's ratings.
The rating agency also placed the A1 insurance financial strength (IFS)
rating of Lincoln National's New York operating subsidiary,
Lincoln Life and Annuity Company of New York, on review for possible
upgrade. The review will focus on Lincoln Life and Annuity Company
of New York's strategic importance to the organization and the implied
support from Lincoln National going forward.
The rating agency also noted that the affirmation of the A1 insurance
financial strength rating of First Penn-Pacific Life Insurance
Company reflects that, while its intrinsic, stand-alone
rating is lower than A1, the company receives some ratings uplift
from its ownership by Lincoln National. Moody's explained
that since First Penn-Pacific a niche issuer of term life products
through a specific distribution channel with separate operations,
and since it does not share the Lincoln National brand, the rating
agency doesn't view it as a strategically important operation for Lincoln
National. As a result, First Penn-Pacific's
rating is not aligned with Lincoln's core operating subsidiary's
Moody's noted that the new combined entity's ratings would
incorporate the following expectations: (a) holding company run-rate
cash coverage of interest, preferred dividends and common stock
dividends will be above 1.7 times by year end 2006, with
interest and preferred dividend coverage above 3.7 times -
both metrics to approach 2 times and 4 times, respectively,
by 2007; (b) the operating companies will maintain a NAIC risk-based
capital (RBC) ratio in the 300%-350% range,
prior to the effects of any C-3 Phase I election; (c) financial
leverage (debt to capital) at the holding company will remain in the range
of 20% to 25%; (d) any interim bridge loan financing
will be replaced by permanent financing within six months; (e) no
additional debt will be issued beyond the expected financing at or near
closing of the transaction, and that permanent financing will be
predominantly equity and equity-like hybrids; (f) the company
will have in place an effective hedging and capital management program
to limit the equity risk assumed by the company in the variable annuity
business; and (g) there are no significant negative surprises during
the integration of the two organizations, impacting earnings,
sales, or persistency.
The rating agency said that Lincoln National's (and Jefferson-Pilot's)
ratings could be (further) downgraded if: (a) holding company cash
coverage of interest, preferred dividends and common stock dividends
is below 1.7 times, and/or interest and preferred dividend
coverage is below 3.7 times in 2006, or if both metrics are
likely to not approach 2 times and 4 times, respectively,
by 2007; (b) the operating companies have a NAIC risk-based
capital (RBC) ratio less than 300% prior to the effects of any
C-3 Phase I election; (c) financial leverage (debt to capital)
at the holding company exceeds 25%, or the company fails
to replace any bridge loan financing with permanent financing within six
months; or (d) the integration of the two organizations is poorly
executed with adverse financial and/or operating results.
The rating agency added that the ratings could be upgraded if: (a)
holding company cash coverage of interest, preferred dividends and
common stock dividends is above 3 times with interest and preferred dividend
coverage above 6 times; (b) the operating companies have a NAIC risk-based
capital (RBC) ratio in excess of 375% prior to the effects of any
C-3 Phase I election; (c) financial leverage (debt to capital)
at the holding company is less than 20%; and (d) the company
has a consistent GAAP return on equity above 12% along with stable,
steady growth in reported statutory net income.
The following ratings have been affirmed with a stable outlook:
Lincoln National Corporation -- senior unsecured debt at
A3, commercial paper at Prime - 2, subordinated debt
at (P)Baa1, junior subordinated debt at (P)Baa1, and preferred
stock at (P)Baa2;
Lincoln National Capital V -- preferred stock rating at
Lincoln National Capital VI, VII, VIII, and IX --
preferred stock rating at (P)Baa1;
Lincoln National Life Insurance Company -- insurance financial
strength rating at Aa3;
First Penn-Pacific Life Insurance Company -- insurance
financial strength rating at A1.
The following ratings have been placed on review for possible downgrade:
Jefferson-Pilot Life Insurance Company -- insurance
financial strength rating at Aa2;
Jefferson Pilot Financial Insurance Company -- insurance
financial strength rating at Aa2;
Jefferson-Pilot Capital Trust A -- preferred stock
rating at A3;
Jefferson-Pilot Capital Trust B -- preferred stock
rating at A3.
The following rating has been placed on review for possible upgrade:
Lincoln Life & Annuity Company of New York -- insurance financial
strength rating at A1
Lincoln National Corporation is headquartered in Philadelphia and reported
total assets of $119.0 billion and shareholders' equity
of approximately $6.4 billion as of June 30, 2005.
Jefferson-Pilot Corporation is headquartered in Greensboro,
North Carolina and reported total assets of $35.8 billion
and shareholders' equity of approximately $4.1 billion as
of June 30, 2005.
Moody's insurance financial strength ratings are opinions of the ability
of insurance companies to repay punctually senior policyholder claims
For more information, visit our website at www.moodys.com/insurance.
Financial Institutions Group
Moody's Investors Service
Financial Institutions Group
Moody's Investors Service
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.
Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com
under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.
Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.