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.
23 Apr 2008
Moody's affirms Liberty Mutual's ratings; outlook changed to negative
Pending acquisition of Safeco Corporation for approximately $6.2 billion.
New York, April 23, 2008 -- Moody's Investors Service has affirmed the debt and insurance financial
strength ratings of Liberty Mutual Group Inc. (LMGI) and its subsidiaries
following the company's announcement this morning of a definitive agreement
to acquire SAFECO Corporation (NYSE: SAF) for approximately $6.2
billion. The outlook for all of Liberty Mutual's long-term
ratings has been changed to negative, from stable. The outlook
for the company's short-term Prime-2 rating for commercial
paper remains stable, based on a guarantee provided by Liberty Mutual
Insurance Company (LMIC).
According to Moody's, the ratings were affirmed because the acquisition
represents a sound strategic move for Liberty Mutual that will further
strengthen the group's Agency Markets franchise and its presence
in the California and Pacific Northwest regions, as well as in surety,
and that will bring further balance between the group's commercial
and personal lines operations. Furthermore, Moody's
believes that the limited geographic and agency overlap of the two companies'
operations should help to both enhance the combined group's operational
platform and to mitigate integration risks post-acquisition.
Upon completion of the transaction, Liberty Mutual will become the
fifth largest property and casualty insurer in the United States.
Moody's added that these positive franchise-related developments
will, in its view, be somewhat offset over the near-to-intermediate
term by incrementally negative financial considerations driven by the
price and funding of the deal.
The rating agency noted that the change to a negative outlook is primarily
driven by the decrease in Liberty Mutual's financial flexibility
and capital adequacy measures that will result from the significant use
of internal resources to finance the acquisition, as well as by
increased leverage to tangible capital that will result by the generation
of substantial goodwill intangibles given the purchase price. Specifically,
Moody's noted that although Liberty Mutual's capital adequacy
-- like that of nearly all of its major industry competitors --
has strengthened substantially in recent years through earnings and internal
capital generation, as well as through capital-raising initiatives,
the group's underwriting leverage will increase -- and its
risk-adjusted capital measures will decrease -- substantially
following the completion of the acquisition.
Although Moody's currently views Liberty Mutual, like many
of its competitors, as having total capital that is in excess of
current expectations for the group's rating level, the rating
agency believes that at least a portion of this excess capital will be
necessary to help insulate the company from the likely effects of the
current industry-wide down-cycle over the coming years.
Moody's believes that this concern is somewhat tempered by its view
that SAFECO's operations have continued to maintain a strong level
of capital adequacy at the insurance subsidiaries, and that the
combined operation's risk-adjusted capital metrics should
benefit incrementally from a broader diversification of risk. With
respect to financial flexibility, Moody's noted that the proposed
funding for the acquisition, assuming LMGI's issuance of up
to $1.5 billion of hybrid securities and debt, will
result in a heightened financial leverage profile relative to tangible
capital. Moody's noted that although it does not consider
LMGI's pro forma financial flexibility and capital adequacy position
to be incompatible with the group's current long-term ratings,
a further weakening of either of these factors -- or failure to raise
capital externally having significant equity-like character in
a timely manner -- would likely lead to a downgrade of LMIC's
and LMGI's long-term ratings. Consequently,
Moody's views Liberty Mutual's financial metrics, pro
forma for the pending acquisition and inclusive of the company's
plan to raise external capital, to be at the limits for expectations
at the current rating level with respect to both capital adequacy and
Moody's also noted other general risks associated with the pending
acquisition and integrating the acquired operations. Specifically,
the premium being paid relative to SAFECO's prior market value and
book value per share raises questions about future growth rates and expense
efficiencies that may or may not be achievable over the intermediate term,
given prevailing industrywide cycle trends.
Finally, with respect to Liberty Mutual's notching (i.e.
the difference between the group's debt and insurance financial strength
ratings), Moody's noted that the expected coverage by Liberty
Corporate Services (LCS) of LMGI's debt service requirements --
pro forma for acquisition-related capital raising -- as well
as any potential future debt servicing costs will likely be reduced,
placing incrementally larger debt servicing requirements on dividend flows
from LMIC to LMGI. Although Moody's continues to maintain the existing
notching, this analytic issue could be reconsidered over time,
should coverage levels by LCS diminish significantly.
The following ratings have been affirmed, with outlooks changed
to negative, from stable:
Liberty Mutual Group, Inc. -- guaranteed senior
unsecured debt at Baa1 (originally issued by Liberty Mutual Capital Corporation,
and subsequently merged into LMGI) based on a guarantee from Liberty Mutual
Insurance Company; senior unsecured debt at Baa2; junior subordinated
debt at Baa3;
Liberty Mutual Insurance Company -- insurance financial
strength at A2; surplus notes at Baa2; long-term issuer
credit rating at Baa1;
Ohio Casualty Corporation - senior unsecured debt at Baa2;
[Ohio Casualty Corporation's shelf registration has been withdrawn,
as have its provisional ratings for senior unsecured debt at (P)Baa2,
subordinated debt at (P)Baa3, and preferred stock at (P)Ba1;
for the same reason, the provisional ratings of the Ohio Casualty
Capital Trusts I and II for preferred securities at (P)Baa3 have also
Insurance financial strength ratings at A2 for other members of the Liberty
Mutual and affiliated intercompany pool members, including the following:
- American Fire & Casualty Company
- Avomark Insurance Company
- Employers Insurance of Wausau
- First Liberty Insurance Corporation
- Liberty Insurance Company of America
- Liberty Insurance Corporation
- Liberty Insurance Underwriters, Inc.
- Liberty Mutual Fire Insurance Company
- Liberty Mutual Insurance Company
- Liberty Surplus Insurance Corporation
- LM Insurance Corporation
- Ohio Casualty Insurance Company
- Ohio Security Insurance Company
- Wausau Business Insurance Company
- Wausau General Insurance Company
- Wausau Underwriters Insurance Company
- West American Insurance Company
The following rating has been affirmed with a stable outlook:
Liberty Mutual Group, Inc. -- rating at Prime-2
for commercial paper (guaranteed by Liberty Mutual Insurance Company).
Moody's most recent rating action on Liberty Mutual was on May 7,
2007, when the rating agency upgraded Liberty Mutual Group Inc.'s
non-guaranteed long-term debt and confirmed its other ratings
on the company and its subsidiaries.
Liberty Mutual Group Inc. (LMGI), based in Boston,
is a mutual holding company for a diversified global insurance group that
provides personal and commercial insurance products both domestically
and internationally. The group was the sixth largest property and
casualty insurer in the U.S. based on 2007 direct written
premium. On a GAAP basis, for the full year 2007, the
group reported net earned premiums of $21.9 billion and
net income of $1.5 billion. As of December 31,
2007, LMGI reported consolidated GAAP assets of $94.7
billion and policyholders' equity of $12.4 billion.
Moody's insurance financial strength ratings are opinions of the ability
of insurance companies to repay senior policyholder claims and obligations.
For more information, visit our website at www.moodys.com/insurance.
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service
Financial Institutions Group
Moody's Investors Service
No Related Data.
© 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.