Old Mutual: Fitch rating endorses reorganisation

Fitch Ratings affirms Old Mutual’s long-term issuer default rating at BBB+.

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Johannesburg - Rating agency Fitch Ratings affirmed Old Mutual’s long-term issuer default rating (IDR) yesterday at BBB+ and Old Mutual Wealth (OMW) Life Assurance insurer financial strength (IFS) rating at A-.

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Old Mutual’s share price yesterday rose 0.36 percent to R39.13. The move reflected Fitch’s view that under the group’s reorganisation plans, OMW would operate as a stand-alone UK and European insurance business.

However, it said it had an evolving outlook to reflect the material uncertainty around OMW’s future stand-alone credit profile. Fitch downgraded the IFS rating of Mutual & Federal, the short-term insurance firm owned by Old Mutual, to BBB- from BBB, with a stable outlook.

It said the rating action followed the downgrade of South Africa’s long-term local currency IDR to BBB- from BBB.

It warned that a junk rating would trigger a corresponding action on Mutual & Federal’s IFS rating and Old Mutual’s IDR.

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