S&P may downgrade Prudential

Standard & Poor's said it placed Prudential plc's A+ long-term counterparty credit rating, along with the ratings of its subsidiaries, on CreditWatch with negative implications.

The negative watch comes after news that Prudential plans to acquire an AIG subsidiary, AIA Group Ltd.

The watch reflects the size and weaker credit profile of AIA relative to Prudential and that the transaction likely will have a material adverse impact on Prudential's key credit metrics, such as capitalization and fixed-charge coverage, S&P said.

The agency also said it believes the transaction carries significant execution risks.

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