S&P lowers Aflac

Standard & Poor's said it lowered its ratings on Aflac Inc. and placed them on CreditWatch with negative implications.

The downgrade resulted from the company's concentrated exposure to banks and financial institution sector credits in its investment portfolio and the weakened credit quality this sector has experienced over the past three to six months, the agency said.

The CreditWatch listing will be resolved as Aflac's potential for economic investment losses and the resulting effect on statutory capital becomes more quantifiable during the first quarter of 2009, S&P said. The ratings will likely be lowered by an additional notch if investment losses are expected to lead to an erosion of statutory capital of at least $400 million (net of earnings and fixed charges) or by at least two notches if the decline in statutory capital is expected to be at least $800 million.

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