Fitch rates Protective Life notes BBB

Fitch Ratings said it assigned a BBB rating to Protective Life Corp.'s $800 million senior notes.

Proceeds from the notes will be used to buy $800 million of surplus notes of Golden Gate Captive Insurance Co., a financial captive wholly owned by Protective Life's primary life operating company, Protective Life Insurance Co.

According to the agency, Golden Gate intends to use the proceeds of its new surplus notes issuance to repurchase and cancel $800 million of surplus notes previously issued to third-party purchasers.

Fitch said it views the senior debt issuance and surplus note refinancing as a positive step in reallocating capital between Protective Life Insurance Co. and Golden Gate.

The outlook is negative. It reflects uncertainties associated with the reserve financing efforts, the reserve credit on reinsurance and the ultimate realization of future investment losses.

However, Fitch said that the ratings continue to reflect the company's favorable earnings performance, strong liquidity and good competitive position in the U.S. life insurance market.

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