A.M. Best Assigns Ratings to Great-West Lifeco's Preferred Shares.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--April 10, 2003 A.M. Best Co. has assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. debt ratings of "a" to the proposed CAD 600 million 4.80% Non-Cumulative First Preferred Shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. , Series E and CAD 200 million 5.90% on-Cumulative First Preferred Shares, Series F issued by Great-West Lifeco The Great-West Life Assurance Company (known more commonly as Great-West Life) is a life and health insurance company. Its headquarters is located in Winnipeg, Manitoba, Canada and its CEO is Raymond L. McFeetors. Inc. (Lifeco) (Winnipeg). These securities will be issued in exchange for Canada Life Financial Canada Life Financial Corporation TSX: CL is a Canadian company that offers life, health, and disability insurance for groups and individuals. Founded in 1847, it was acquired by The Great-West Life Assurance Company in 2003, after rejecting a hostile takeover bid by Corporation's (CLF CLF The ISO 4217 currency code for Chile Unidades de Fomento. ) (Toronto) common shares and is part of Lifeco's overall financial plan to fund its acquisition of CLF. In addition to the preferred shares offering, Lifeco intends to fund the acquisition through a combination of common equity, debt and cash. Subject to shareholder and regulatory approvals, the transaction is expected to close during the third quarter of 2003. Concurrently, A.M. Best placed these ratings under review with negative implications due to Lifeco's announced intent to acquire CLF for CAD 7.3 billion. On February 19, 2003, the financial strength ratings of Lifeco's principal life insurance companies were placed under review with negative implications along with the outstanding debt ratings of Lifeco and its subsidiaries. These rating actions were in response to Lifeco's offer to purchase CLF and were based upon the heightened leverage and significant goodwill associated with the closing of the transaction. However, A.M Best believes that Lifeco will face significant integration challenges along with the uncertainty surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. the ultimate realization of planned cost savings. The issuance of CAD 600 million senior debentures during the first quarter of this year and the planned issuance of the preferred shares will increase leverage ratios beyond what A.M. Best considers appropriate for the current rating levels. As of December 31, 2002, Great-West Lifeco Inc. reported consolidated assets (including segregated funds Segregated Fund A type of annuity that is similar to a mutual fund, and is an insurance product and offered only by insurance companies. Notes: Most segregated funds will guarantee a specific return, anywhere from 70% to 120%, over a certain period of time (five-10 years). ) of CAD 96.1 billion and capital stock and surplus of CAD 4.7 billion. For a list of A.M. Best's current debt ratings, please visit www.ambest.com/ratings/debtrating/companies.html . A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com . |
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