MOODY’S PLACES LONG-TERM RATINGS OF ALLIANZ GROUP UNDER REVIEW FOR POSSIBLE DOWNGRADE
Moody’s today placed its ratings for the Allianz Group (Aa2 senior debt guaranteed by Allianz AG and see list below) under review for possible downgrade. The rating action also includes the ratings of the Dresdner bank group. Moody’s added that the C- bank financial strength rating and A2 preferred stock at Dresdner remain under review for possible downgrade.
Moody’s commented that it had maintained its negative outlook on the ratings of the Allianz Group at the announcement in March 2003 of the rights issue process, while citing concerns in the short-term over the sustainability and quality of earnings of certain major subsidiaries. Supporting its move to review, Moody’s is increasingly concerned at the performance of some key group entities. Moody’s notes the improved level of underwriting performance in some major non-life areas, with the Group’s combined ratio at under 98% for the first quarter of 2003. However, Dresdner Bank, although showing some improvement in the first quarter, is, in Moody’s view, likely to remain a material drag on the Group’s earnings for some time, given its reliance on the depressed German economy and its exposure to capital markets slowdowns. Secondly, although Moody’s notes positively the improving performance at ‘turnaround’ units such as Fireman’s Fund and Allianz Global Risks, AGF continues to underperform which, given its significant weight within the Group is likely to hold back earnings growth of the Group. In addition, all operations continue to be affected by asset impairments and writedowns, and could potentially continue to do so for the next few quarters.
In terms of capital, Moody’s notes that the Group’s capital position remains relatively strong, as a result of the recent equity raising and rebounds in equity markets since end March 2003. However, more negatively the Group continues to retain significant – albeit reducing – exposure to equity market volatility, such that market falls could again reduce the Group’s capitalisation levels. In addition, the Group’s strong business growth in some areas creates in some cases material levels of financing needs.
Moody’s review, which is likely to be concluded within the next few months, will therefore focus on the ability of the Group to successfully improve the performance of its underperforming business units, as well as the Group’s intentions in terms of managing its business growth relative to its capital base. Moody’s will also examine the Group’s short-term goals in mitigating its risk profile, in terms of asset exposure and business profile.
The following ratings were placed under review for possible downgrade
INSURANCE FINANCIAL STRENGTH RATINGS
AGF Vie: Aa2 IFSR
AGF IART: Aa2 IFSR
Allianz Elementar Versicherungs-AG: Aa3 IFSR
Allianz Elementar Lebensversicherungs-AG: Aa3 IFSR
Allianz Lebensversicherungs-AG: Aa1 IFSR
Allianz Life Insurance Co of North America: A1 IFSR
Allianz Suisse Lebensversicherungs-Gesellschaft: Aa3 IFSR
Allianz Suisse Versicherungs-Gesellschaft: Aa3 IFSR
Cornhill Insurance plc : A1 IFSR
Fireman's Fund Insurance Company (and associated entities): A1 IFSR
Hermes Kreditversicherungs-AG: Aa3 IFSR
Lloyd Adriatico SpA: Aa3 IFSR
Riunione Adriatica di Sicurta SpA: Aa2 IFSR
INSURANCE DEBT RATINGS
Allianz Finance BV: Aa2 senior debt
Allianz International Finance NV: Aa2 senior debt
Allianz Finance II BV : Aa2 senior debt and A1 subordinated debt
Dresdner Bank AG: Aa3 long-term deposit and debt ratings; Aa3 MTN programme; A1 subordinated debt ratings.
Dresdner Bank AG, New York Branch: A1 subordinated debt ratings.
Dresdner Bank Luxembourg SA: A1 long-term deposit and debt ratings; A2 subordinated debt rating.
Dresdner Finance NV: Aa3 guaranteed long-term debt rating; Aa3 guaranteed long-term notes under their MTN programme.
Dresdner International Finance plc: Aa3 guaranteed long-term debt rating.
Dresdner Bank Ireland: A1 deposit ratings.
The Following ratings remain under review for possible downgrade:
Dresdner Bank AG: C- FSR
Dresdner Funding Trusts: A2 preferred stock ratings.
Dresdner Bank Luxembourg: C+ FSR
The following ratings were confirmed with a stable outlook
Allianz AG: P-1 Commercial Paper
Allianz Finance Corporation: P-1 Commercial Paper
Hermes Kreditversicherungs-AG: P-1 short-term insurance financial strength
Dresdner Bank AG: Prime-1 short-term deposit and debt ratings
Dresdner Bank Ireland: Prime-1 deposit and debt ratings and C- FSR.
Dresdner Bank Luxembourg SA: Prime-1 short-term deposit rating.
Dresdner Finance NV: Prime-1 guaranteed short-term notes under their MTN programme
Dresdner US Finance Inc: P-1 short term debt rating.
© 2020 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/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH CURRENT OPINIONS. MOODY'S INVESTORS SERVICE 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 INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND OTHER 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. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS 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,
ASSESSMENTS, OTHER OPINIONS, AND 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, ASSESSMENTS, OTHER OPINIONS OR 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.
MOODY'S CREDIT RATINGS,
ASSESSMENTS, OTHER OPINIONS AND 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 its 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, ASSESSMENT, 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 credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service 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 credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit 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.