Moody’s alters Equitable view to positive

Moody’s Investors Service said it changed the outlook for Equitable Holdings Inc. to positive from stable and affirmed the company’s Baa2 senior unsecured debt rating.

Equitable entered an agreement with Venerable Holdings Inc., which will reinsure around $12 billion of reserves for legacy variable annuity policies. Venerable will also acquire Equitable’s runoff VA reinsurance entity, Corporate Solutions Life Reinsurance Co.

` Equitable will receive around $300 million from Venerable, in addition to being able to release around $800 million of capital backing the business. Equitable is also in talks to acquire a 9.9% equity stake in Venerable with a board seat, the agency said.

“The change in outlook to positive from stable reflects Moody’s view that the transaction will reduce Equitable’s exposure to capital and earnings volatility from its legacy VA block. The terms of the transaction also demonstrate the company’s prudent risk management of the VA business and its economic hedging program,” Moody’s said in a press release.

Moody’s also changed the outlook to positive from stable and affirmed the Baa2 senior unsecured debt ratings of Pine Street Trust I and Pine Street Trust II.

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