Fitch downgrades Prudential

Fitch Ratings said it downgraded the long-term ratings of Prudential plc following the company's announcement that it plans to separate its U.K. & European businesses (M&G Prudential) from the rest of the group.

Rating actions include a downgrade of Prudential Assurance Co. Ltd.'s (PAC) and Prudential's U.S. subsidiaries' (collectively Jackson) insurer financial strength ratings to AA- from AA.

The agency also downgraded Prudential's long-term issuer default rating to A from A+ and unsecured senior debt rating to A- from A.

The short-term issuer default rating and commercial paper ratings were affirmed at F1.

The outlook is stable.

“Fitch believes that today's announcement crystallises Prudential's strategic intent to separate M&G Prudential from the relatively higher-growth US and Asia-Pacific businesses,” the agency said in a news release.

“Fitch has concluded that PAC, the main insurance operating subsidiary of M&G Prudential, will no longer be treated as "Core" to the Prudential group under the agency's group rating methodology.

“Fitch now rates PAC and Jackson separately, whereas previously the two were rated by applying a group IFS rating approach based on the consolidated profile of Prudential's global insurance operations.”

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