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Fitch cuts Ethias' perpetual debt to B, still on "negative" watch.

(ADPnews) - Aug 24, 2009 - Fitch on Friday lowered to B from BB- and maintained on "negative" watch the subordinated debt rating of Belgian composite insurer Ethias SA.

The move follows Fitch's review of the risk of coupon deferral on this instrument, taking into account recent developments.

In particular, the risk reassessment was prompted by comments released by the European Commission (EC) on the concept of "burden sharing" for state-aided financial institutions.

Ethias received EUR 1.5 billion (USD 2.1bn) of support from Belgian public organisations last December and is at an early stage of discussions with the EC over the restructuring plan it has submitted in line with the European Union's state aid rules.

Fitch has also factored in Ethias' December 2008 coupon payment on its hybrid instrument.

The analysts will continue to monitor the ratings implications of Ethias' restructuring plan and ongoing talks with the EC.

The rating move on Ethias' hybrid mimics actions taken on the hybrids of several financial institutions that have received state aid.

(EUR 1.0 = USD 1.433)

Rating agency website:

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Publication:ADP News Belgium
Date:Aug 24, 2009
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