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December 3, 2007 |
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EQUITABLE LIFE INSURANCE: Gets S&P's 'BB+/B' Credit Ratings Standard & Poor's Ratings Services, on Nov. 30, 2007, assigned its 'BB+' long-term and 'B' short-term issuer credit ratings to Equitable Life Insurance Co. Ltd. The outlook is stable. ELIC is one of the core companies within the New Zealand Equitable group, a NZ non-bank financier with long-standing expertise in commercial-property lending. Strengths underpinning the ratings on the NZ Equitable companies include: -- the group's good asset quality, -- supportive shareholder, and -- manageable and decreasing related-party lending. Offsetting these strengths are: -- NZ Equitable's concentration in large counterparty borrowers and commercial property assets; -- declining profitability and interest margins; and -- rudimentary but improving risk-management practices. “NZ Equitable is considered to be one of the more financially sound non-bank deposit-taking companies in New Zealand,” said Standard & Poor’s credit analyst Shaun Evans. “Despite the difficult conditions experienced in the NZ NBDT sector this year, NZ Equitable has demonstrated considerable flexibility and attention to matters impacting its financial strength, evidenced by the recent sourcing of two additional bank funding lines totaling NZ$125 million.” The stable outlook reflects Standard & Poor's expectation that ELIC will remain core to NZ Equitable, and that NZ Equitable's financial characteristics, measured growth strategy, and strong shareholder support will be maintained in the medium term. NZ Equitable may be challenged to increase profitability, considering that some contraction of interest margins, higher costs, and possibly some higher level of credit provisions are anticipated. Nevertheless, we expect that NZ Equitable's future profitability, taking into account its risk profile, should remain generally consistent in the medium term with ratings assigned. |
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