Moody's rates Pacific Life notes A3

Moody's Investors Service said it assigned an A3 debt rating with a negative outlook to the $1 billion of 9.25% surplus notes maturing June 2039 to be issued by Pacific Life Insurance Co.

The outlook is negative.

Proceeds will be used for general corporate purposes.

"The surplus note issuance bolsters Pacific Life's capital adequacy, which is challenged by increased investment losses and volatility in reserve charges associated with variable annuity guarantees as a result of equity market losses," Moody's senior credit officer Arthur Fliegelman said in a statement.

Pacific Life's credit profile benefits from a strong market presence and reputation in the upscale life insurance market, and the consistent profitability of the company's aircraft-leasing business, the agency said.

These strengths are tempered by the sensitivity of earnings and capital adequacy, exposure to investment losses and the competitive environment for its products, the agency noted.

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