S&P downgrades Milli Re

S&P said it lowered the Turkey national scale rating on Milli Reasurans TAS (Milli Re) to trAA- from trAA.

The downgrade follows the outlook revision on the long-term local- and foreign-currency sovereign ratings on Turkey, S&P said.

As a result of the sovereign rating action, the agency lowered the national scale rating on Isbank, the parent company of Milli Re, the agency explained.

The downgrades reflect increasing concerns about inflationary pressure, currency depreciation and rising external and fiscal risks in Turkey, S&P said.

Istanbul-based Milli Re is considered a moderately strategically important subsidiary of Isbank, one of Turkey's leading banks and the 77% owner of Milli Re, the agency said.

As a reinsurer, Milli Re invests most of its assets in Turkey, S&P added. Given these factors, the agency said it limits the rating on Milli Re at the parent- and sovereign-level and expects the ratings to move in tandem with those ratings.

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