Crown Life Insurance Ratings Remain on S&PWatch Neg.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 8/31/98-- Standard & Poor's single-'A'-minus counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit and financial strength ratings on Crown Life Insurance Co. remain on CreditWatch with negative implications, where they were placed May 26, 1998. The CreditWatch placement followed the announcement that The Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of Life Assurance Co. will be purchasing the majority of Crown Life's businesses. Standard & Poor's views what will remain of Crown Life as essentially a business in run-off run-off n (in contest, election) → desempate m (= extra race); carrera de desempate run-off n (in contest, election) → . Although the new Crown Life will be well capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. , it will lack the characteristics of a business run as a going concern, namely one that attracts new business and new capital. Thus, in Standard & Poor's view, the new Crown entity does not warrant a financial strength rating above triple-'B'. At the close of the transaction, expected in the fourth quarter of 1998, Standard & Poor's expects to lower its ratings on Crown Life to triple-'B'. Other major rating factors include: -- Highly redundant Repetitive. See redundancy. capital, with a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma Standard & Poor's capital adequacy ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. exceeding 300% expected after the transaction. The high level of risk-adjusted capital with respect to risk-adjusted liabilities is the dominant strength for the rating. -- An asset portfolio that comprises about 73% real estate-related assets, which are primarily performing assets. Real estate, which was a major concern for the Crown asset portfolio in the early part of the decade, has receded in size and as a major issue of concern for the Crown investment portfolio. The remainder of the asset portfolio prospectively will consist of high-quality bonds, commercial paper, and cash. -- Interest coverage will be just under 4 times for the short to medium term. This level of interest coverage is consistent with the rating. However, Standard & Poor's notes that a large portion of income at the new Crown entity prospectively will derive de·rive v. 1. To obtain or receive from a source. 2. To produce or obtain a chemical compound from another substance by chemical reaction. from real estate-related activities. -- Good levels of capital and liquidity will be maintained. -- Senior management, which is key to the future operations at Crown, is expected to be retained. -- The high level of capital will cover all remaining liabilities, Standard & Poor's said. -- CreditWire
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