S&P Keeps Swiss Re on CreditWatch as GE Deal Nears Closing

Standard & Poor’s Ratings Services announced that it would keep both GE Insurance Solutions (GEIS) and Swiss Re on its CreditWatch list, as they continue to work on their agreement to sell GE’s insurance business.However, while GEIS CreditWatch placement is designated as “positive” (See related article in National), Swiss Re’s remains “negative.”

“The CreditWatch placement will be resolved when the transaction to acquire GEIS completes, which is expected to be mid-2006,” noted S&P credit analyst Simon Marshall.

S&P said the “CreditWatch status reflects the execution risk associated with integrating a group of the size and complexity of GEIS, which is rated lower than Swiss Re. The ratings on GEIS partly reflect the state of flux that it has been in for a number of years, caused by uncertainty over the long-term ownership of the group.

“These risks are partly offset, however, by Swiss Re’s track record of successful transatlantic acquisitions and the advanced integration planning already in place. If the transaction is completed as currently constituted, we expect that the ratings on Swiss Re and its core operating companies would be lowered to ‘AA-‘ with a stable outlook. If the transaction does not proceed, the ratings on Swiss Re would be affirmed at their current level.”