|[February 07, 2013]
Fitch Expects to Rate ING U.S.'s New Sr. Unsecured Notes 'BBB-'
NEW YORK --(Business Wire)--
Fitch Ratings expects to assign a 'BBB-' rating to ING U.S., Inc.'s (ING
U.S.) $1 billion planned issuance of 2.9% senior notes due 2018. The
transaction is expected to close on Feb. 11, 2013.
The net proceeds of this offering will be used for general corporate
purposes, including repayment of commercial paper and amounts owed under
its term loan agreement. Pro forma financial leverage is expected to
remain near 27%.
On Jan. 7, 2013, Fitch affirmed all of its ratings for ING U.S. and its
subsidiaries with a Stable Outlook.
The key rating triggers that could result in a downgrade include:
--Inability to complete an IPO as planned. This would include not being
able to secure third party financing to replace the $500 million of
remaining intercompany debt and the $1.275 billion bank term loan;
--A decline in reported risk-based capital (RBC) below 385%;
--Financial leverage exceeding 30% after the IPO;
--Significant adverse operating results;
--Further material reserve charges required in its insurance/variable
annuity books or a significant weakening of distribution channel or
The key rating triggers that could result in an upgrade include:
--Increased operating profitability and generation of consistent
--Sustained maintenance of GAAP interest coverage over 10x and statutory
interest coverage over 4x;
--A reported RBC above 450%, and financial leverage below 25%;
--Private sale of closed-block bok at good value with boost to
capitalization and reduction in volatility and risk.
Fitch expects to assign the following:
ING U.S., Inc.
--2.9% Senior Notes due Feb. 2018 at 'BBB-'.
Fitch currently rates the ING U.S. entities as follows:
ING U.S., Inc.
--Long-term Issuer Default Rating (IDR) at 'BBB';
--5.5% senior notes due July 15, 2022 at 'BBB-'.
ING Life Insurance and Annuity Company
ING USA Annuity and Life Insurance Company
ReliaStar Life Insurance Co.
ReliaStar Life Insurance Company of New York
Security Life of Denver Insurance Company
--Insurer Financial Strength (IFS) at 'A-'.
Equitable of Iowa Companies, Inc.
--Long-term IDR at 'BBB'.
Equitable of Iowa Companies Capital Trust II
--8.424% Trust Preferred Stock at 'BB'.
Additional information is available at 'www.fitchratings.com'.
The ratings above were solicited by, or on behalf of, the issuer, and
therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research::
--'Insurance Rating Methodology' (Jan. 11, 2013).
Applicable Criteria and Related Research:
Insurance Rating Methodology ??? Amended
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