Fitch puts Pacific Century on positive watch

Fitch Ratings said it placed Pacific Century Insurance Co. Ltd.'s BBB+ issuer default rating and the BBB+ senior unsecured debt rating of PCI Capital Ltd. on Ratings Watch positive following the announcement that Fortis Insurance NV has agreed to acquire a 50.48% stake in Pacific Century's holding company from Pacific Century Regional Developments Ltd. (44.94%) and several other shareholders (5.54%). At the completion of the transaction, Fortis is required by Hong Kong's Takeovers Code to make a mandatory general offer for the remaining shares in Pacific Century's holding company it does not already own.

The Rating Watch placement reflects Fitch's view that should Fortis succeed in obtaining a majority stake, Pacific Century's ratings would likely benefit from a one-notch uplift due to its expected strategically important to Fortis, which plans to use Pacific Century as its regional headquarters in Asia, and an expected benefit to Pacific Century's operations from Fortis' brand value and management expertise.

The agency said it believes Pacific Century's current capitalization and earnings profile continue to be supportive of its standalone ratings and that key challenges facing the company include its relatively modest position in the Hong Kong market and its exclusive reliance on its tied agency force.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.