TEXT - Fitch rates Mapfre senior debt 'BB+'
(The following statement was released by the rating agency) Nov 19 - Fitch Ratings has assigned Mapfre SA's (Mapfre) EUR1bn senior dated unsecured notes a 'BB+' rating. At the same time, Fitch has affirmed Mapfre's Issuer Default Rating (IDR) at 'BBB-' and its core operating subsidiaries' Insurer Financial Strength (IFS) rating at 'BBB'. The Outlook on the ratings is Negative. A full list of rating actions is below. The notes were issued on 16 November 2012 and will pay a 5.125% coupon until maturity date in 2015. The proceeds will at least temporarily improve the liquidity position of Mapfre. However, the company has a bank facility maturing in May 2013, and Fitch believes that Mapfre could use part of the proceeds to repay this loan. Fitch regards this issuance as neutral for Mapfre's current ratings. Although the issuance leads to an increase in financial leverage from 27% at end-2011 to an estimated 34% on a pro-forma basis at 9M12, Fitch believes the increase is temporary, on the assumption that the proceeds will be used to refinance maturing bank facilities. Mapfre's credit fundamentals continue to be robust, as reflected in the group's solid capital adequacy (consolidated shareholders' funds totalling EUR7.8bn at 9M12 compared with EUR7bn at end-2011) and strong underwriting performance, as measured by a reported combined ratio of 95.3% at 9M12. However, Mapfre's ratings continue to be closely linked to the rating of Spain, given its holdings of Spanish debt and exposure to the Spanish economy. As a result, Fitch views Mapfre's IFS ratings as capped by Spain's Long-term IDR of 'BBB'. Mapfre's ratings would likely be downgraded if the Spanish sovereign rating was downgraded. The ratings could also be downgraded if exposure to the Spanish insurance market or sovereign debt resulted in underwriting or investment losses beyond Fitch's current expectations. The rating actions are as follows: Mapfre Familiar Mapfre Global Risks Cia De Seguros Y Reaseguos Mapfre Vida SA De Seguros Y Reaseguros IFS affirmed at 'BBB'; Outlook Negative Mapfre Re Compania De Reaseguros S.A IFS affirmed at 'BBB'; Outlook Negative Mapfre SA Long-term IDR affirmed at 'BBB-'; Outlook Negative EUR700m 5.91% subordinated debt due 2037 with step-up in 2017 affirmed at 'BB-' EUR1bn 5.125% senior unsecured debt due 2015 assigned 'BB+' (Caryn Trokie, New York Ratings Unit)
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