Fitch might cut Old Mutual

Fitch Ratings said it placed Old Mutual plc's BBB long-term issuer default rating and BBB- senior note program on rating watch negative.

The agency simultaneously affirmed the subordinated debt at BB.

Fitch also said it affirmed Old Mutual Insure Ltd.’s (OMI) insurer financial strength rating at BB+/stable and Old Mutual Life Assurance Co. (South Africa) Ltd.’s national insurer financial strength rating at AAA(zaf).

The outlooks are stable.

Fitch said the negative watch reflects its expectation that the Old Mutual group's proposed unbundling of the Old Mutual Wealth business unit (OMW) will remove the hard-currency interest cover of any remaining debt obligations of Old Mutual.

The group intends to retain Old Mutual plc and any remaining debt under its South African-based Old Mutual Emerging Markets business unit.

As a result, Fitch said Old Mutual's issuer default rating and senior notes' rating would be capped by South Africa's sovereign long-term local-currency issuer default rating (BB+/stable).

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