Moody's confirms Royal & Sun

Moody's Investors Service confirmed the ratings of Royal & Sun Alliance Group and its European operations including Royal & Sun Alliance Insurance Group plc's subordinated debt at Ba2. The insurance financial strength ratings of Royal & Sun Alliance USA were downgraded to Ba3, however.

Negative outlooks apply to the long-term ratings of the group in both the European and U.S. operations, excluding the Scandinavian operations where a stable outlook applies.

The confirmation reflects in part the successful completion of the £960 million rights issue, with a generally favorable response. Funds are currently expected to be maintained in U.K. operations until they are downstreamed to subsidiaries to provide reserve strengthening.

Furthermore, the group has successfully completed the renegotiation and renewal of its external bank lines that were due to expire in October 2003, and financial leverage is generally expected to be at lower levels going forward.

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