Moody's cuts Friends Provident

Moody's Investors Service said it downgraded Friends Provident plc's junior subordinated debt rating to Baa2 from Baa1, concluding the review for downgrade that began on Nov. 19 following the announcement that Philip Moore, the former chief executive of Friends Provident, had resigned and that the group was working on a detailed review of its strategic options.

The outlook is negative.

The agency said it believes that Friends Provident's franchise has been under pressure in recent times as a result of being a mid-sized player in the very competitive U.K. marketplace, exacerbated by the uncertainty in recent weeks as to the outcome of its strategic review.

Moody's also said that profitability remains a credit challenge for the time being and that financial flexibility including access to capital markets has weakened in recent months.

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