Fitch to give A to ACE INA notes

Fitch Ratings said it expects to assign an A rating to the $5.3 billion senior unsecured notes issuance planned by ACE INA Holdings Inc., a subsidiary of ACE Ltd.

The new notes will be fully and unconditionally guaranteed by ACE and are therefore based on ACE's A+ issuer default rating.

The agency expects the net proceeds will be used for the acquisition financing of the Chubb Corp. (AA insurer financial strength rating), which is expected to close in the first quarter of 2016.

Following the acquisition announcement on July 1, Fitch affirmed ACE's insurer financial strength ratings and placed the holding company and debt ratings on negative watch, reflecting pending changes in the agency’s technical notching criteria, as well as the company's higher pro forma financial leverage and lower interest coverage post-acquisition.

On Aug. 27, the agency resolved the Rating Watch Negative and downgraded ACE's holding company and debt ratings one notch with the implementation of the new notching criteria.

Fitch said it views the planned debt issuance favorably since it eliminates near-term acquisition financing risk. Additionally, the debt will likely be issued at reasonable interest rates similar to existing debt, and the resulting overall debt maturity profile will be well laddered.

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