S&P cuts ACE, Chubb to A, rates ACE INA notes A

Standard & Poor's said it removed its ratings on ACE Ltd.'s and Chubb Corp.'s holding companies from CreditWatch with negative implications and lowered the issuer ratings on ACE and its downstream holding company, as well as on Chubb, to A from A+.

The outlooks are negative.

The agency is also assigning its preliminary A senior debt (guaranteed by ACE) rating to ACE INA Holdings Inc.'s pending senior note issue.

"ACE and Chubb have received approvals from their respective shareholders to complete the intended combination. The proposed debt issuance of $5.3 billion in various tranches by ACE will complete the external capital raising required to fund the transaction," S&P credit analyst Tracy Dolin said in a news release.

"Therefore, we view the close of this transaction as imminent--set to take place in first-quarter 2016. The downgrade of ACE and its intermediate holding companies reflects expanded notching between the operating and holding companies. We don't anticipate any extraordinary dividends or quota-share arrangement from Federal Insurance Co. to ACE's non-U.S. affiliates, so on a pro forma basis, the majority of capital will no longer be held in Bermuda, something that had provided the group with significant regulatory flexibility in making dividend payments to the ultimate holding company. The dividend capacity post-acquisition of the operating entities will also be weighted more heavily toward the U.S."

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