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Fitch: Old Mutual on positive watch
Fitch Ratings said it revised the rating watch on the ratings of Old Mutual plc and its operating subsidiaries to Rating Watch positive from Rating Watch negative.
The watch revision reflects Old Mutual's agreement to sell its U.S. life onshore business, OM Financial Life Insurance Co. and OM Financial Life Insurance Co. of New York to Harbinger Capital Partners LLC.
The positive watch reflects a view that the agreed terms are more favorable than expected, Fitch said.
The sale will be for a consideration of $350 million and is expected to result in a net asset value write-off of £689 million, the agency said.
The sale will favorably improve Old Mutual's risk profile by materially reducing its high exposure to United States credit markets and the associated volatility of capital and earnings, Fitch said.
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