Fitch downgrades Aegon

Fitch Ratings said it downgraded Aegon NV's long-term issuer default rating to A+ from AA, senior unsecured debt rating to A from AA-, subordinated debt rating to A- from A+ and short-term issuer default and commercial paper ratings to F1 from F1+.

The agency also downgraded the secured notes of Monumental Global Funding III, Monumental Global Funding II and Monumental Global Funding Ltd. to AA from AA+; Transamerica Corp.'s long-term issuer default rating to A+ from AA; Aegon Funding Co. LLC's senior debt to A from AA- and commercial paper to F1 from F1+; and the senior debt and medium-term notes of Transamerica Finance Corp. and Commonwealth General Corp. to A from AA-.

The outlook is negative.

In addition, Fitch downgraded Aegon's perpetual capital securities and the trust preferred stock of Transamerica Capital II and Transmerica Capital III to BBB+ from A+ and placed these securities on Rating Watch negative.

The downgrade follows Aegon's announcement that it expects to report a fourth-quarter net loss of approximately €1.2 billion and reflects Fitch's updated view of Aegon's exposure to the current volatility in the credit and investment markets.

The rating actions consider the partially offsetting benefits of previously announced Dutch government-provided capital support, the agency noted.

The Rating Watch negative placed on the perpetual capital securities, which are deferrable hybrid instruments, reflects some concern that incentives may develop to defer coupons on these hybrids, Fitch said.

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