Moody's cuts Storebrand

Moody's Investors Service said it downgraded Storebrand Livsforsikring AS' subordinated debt to Baa2, junior subordinated debt to Baa2, subordinated medium-term notes debt to Baa2, junior subordinated medium-term notes debt to Baa2 and capital contribution securities to Baa3, along with Storebrand ASA's senior unsecured medium-term notes debt to Baa3, issuer rating to Baa3, subordinated medium-term notes debt to Ba1 and junior subordinated medium-term notes debt to Ba1.

The outlook was revised to negative from stable.

The downgrade reflects the recent weakened solvency position and pressurized profitability at the group, which reported a 2009 first-quarter pre-tax loss of NOK733 million, driven primarily by writedowns on private equity/property, further investment losses and solvency strengthening activities at its Swedish subsidiary, Moody's said.

Given the deterioration of Storebrand's solvency position over recent quarters as a result of the financial markets turmoil, remedial action by management has become increasingly necessary, the agency said. In Moody's view, these actions have led to some reduction of financial flexibility.

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