S&P might lower AXA

S&P said it placed its AA- long-term issuer credit ratings on the core entities of AXA on CreditWatch with negative implications.

The agency also placed its A/A-1 long- and short-term issuer credit ratings on AXA on CreditWatch with negative implications, along with all issue ratings on AXA's debt.

Additionally, S&P placed its A+ long-term rating on AXA Bank Belgium on CreditWatch with negative implications.

AXA announced its plans to acquire XL Group Ltd. for $15.3 billion. To finance the acquisition, AXA intends to use proceeds from the IPO of a 20%-35% stake of its U.S. life and asset management operations, in addition to cash and debt issuance. AXA also intends to fully exit its U.S. life and AM operations over the coming years.

“The CreditWatch placement reflects a view that the transaction, if completed, could materially weaken AXA's capital adequacy, as per our definition, if AXA fails to successfully deconsolidate its U.S. life and AM operations in the coming years,” the agency said in a news release.

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