Moody's rates Old Mutual issue Baa2

Moody's Investors Service said it assigned a Baa2 rating to Old Mutual plc's lower tier two subordinated debt issue.

The rating is assigned a negative outlook in line with all of the debt ratings of Old Mutual, the agency said, noting that the negative outlook was assigned when the group's ratings were confirmed in February 2006.

The issue is not viewed as incremental debt and the proceeds will be used to repay other instruments maturing during the first half of 2007, and as a consequence, Moody's said it said it view of financial flexibility at Old Mutual is not changed by this issuance and it does not therefore impact on the group's A3 senior debt rating, negative outlook.

Steve Hunnisett, vice president, senior analyst in Moody's European Insurance group commented: "The rating of this instrument particularly reflects the current priority of claim in liquidation, which is pari passu with the $750m perpetual preferred securities (and consequently all other Old Mutual regulatory capital instruments) which are all rated Baa2."

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