(The following statement was released by the rating agency)
NEW YORK, May 15 (Fitch) ING U.S., Inc.'s recent $1.3 billion
offering (IPO) and junior sub debt sale are significant steps in
restructuring process of becoming an independent public company,
Fitch Ratings. The IPO provides the company with increased
distribution awareness and access to capital. Fitch currently
rates ING U.S. and
its insurance subsidiaries on a stand-alone basis. Both
transactions are credit
neutral for the 'BBB' rated entity but they are likely to have
positive ramifications for the credit.
The majority shareholder of ING U.S. is ING Groep N.V. (ING
Group), a leading
publicly traded global banking and insurance group located in
with a strong franchise in a number of countries in Europe and
ING Group has an agreement with the Dutch government to sell its
investment management operations as part of its repayment for
support of more
than EUR10 billion that the company received during the
financial crisis. ING
Group must divest at least 25% of ING U.S. by year-end 2013,
which has been
satisfied by the recent IPO, and more than 50% by year-end 2014,
remaining interest divested by year-end 2016. The base case
scenario calls for
ING U.S. to become a stand-alone business.
Fitch views ING U.S.'s debt servicing capacity as modest, but
improving. As an
independent company, ING U.S. will largely depend on dividend
regulated and nonregulated operating subsidiaries as well as
cash at the holding
company to meet interest payments and other obligations.
company's U.S. insurance subsidiaries have had limited or no
capacity to make
ordinary dividend payments to the parent due to negative earned
surplus in some
statutory subsidiaries and limited positive earned surplus in
subsidiaries. However, statutory dividend capacity will improve
since ING U.S.
has received regulatory approval to transfer amounts out of
paid-in capital into
unassigned funds, thereby creating a positive earned surplus
ordinary statutory dividend capacity.
ING US's remaining parental ties include letter of credit
facilities provided by
ING Bank which have been significantly reduced and replaced by
providers. The remaining facilities are now on an arms-length
basis. We expect
leverage to remain around management's stated target of 25%, in
expectations for the current rating category.
Tana M. Higman
Fitch Ratings, Inc.
70 West Madison
Chicago, IL 60602
+1 (312) 368-3122
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549,
Additional information is available on www.fitchratings.com.
The above article originally appeared as a post on the Fitch
Wire credit market
commentary page. The original article, which may include
hyperlinks to companies
and current ratings, can be accessed at www.fitchratings.com.
expressed are those of Fitch Ratings.
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