Fitch rates Old Mutual Life notes AA(zaf)

Fitch Ratings said it assigned an expected rating of AA(zaf) to Old Mutual Life Assurance Co. (South Africa) Ltd.’s proposed issue of subordinated debt securities.

The notes are rated two notches below the company's national long-term rating of AAA(zaf) to reflect their subordination and moderate risk of non-performance, Fitch said.

The company’s proposed issue of subordinated notes will be issued with a 10-year, 12-year or 15-year maturity or a mixture thereof and will be callable after a period of five- to 10-years, the agency said.

They also could be composed of both fixed- and floating-coupons, Fitch said.

The notes include a mandatory interest deferral feature, which is triggered when the company's capital level falls below the regulatory capital requirement, the agency said.

Fitch said it expects leverage to remain low for Old Mutual Life’s rating category and its interest coverage will be strong.

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