UPDATE 6-BA cancels flights from London as global IT outage causes chaos
* BA latest to be hit by computer problems (Adds comment by BA's chief executive)
Sept 27 - Fitch Ratings has affirmed all Issuer Default Ratings (IDRs), debt and Insurer Financial Strength (IFS) ratings for the Hartford Financial Services Group, Inc. (HFSG) and its primary life and property/casualty insurance subsidiaries. The Rating Outlook is Stable. A full list of ratings follows at the end of this release. Fitch's rating action follows HFSG's announcement today that it has reached an agreement to sell its individual life business to Prudential Financial, Inc. (Prudential) for a ceding commission of $615 million. No legal entities will be sold. The transaction is expected to close in early 2013, subject to regulatory approval. The sale is not expected to have a material impact on HFSG's GAAP shareholders' equity (excluding accumulated other comprehensive income ) but is expected to have a positive net statutory capital impact to Hartford Life of approximately $1.5 billion. This transaction represents the final step in HFSG's strategy (announced in March 2012) to focus on its property/casualty, group benefits, and mutual funds businesses. The company has already reached agreements to sell its retirement plans business to Massachusetts Mutual Life Insurance Company (MassMutual) and to sell Woodbury Financial Services (its independent broker-dealer) to American International Group, Inc. (AIG), with both transactions expected to close by the end of 2012. In addition, U.S. individual annuity and Japan annuity have been placed into runoff, and HFSG has signed an agreement to sell its individual annuity new business capabilities to Forethought Financial Group. Fitch favorably views HFSG's ability to enter into these agreements in a timely manner and for a reasonable price. A lengthy time horizon for a sale could have increased uncertainty and impaired the market position of these businesses and potentially forced a distressed sale. Favorably, over the long term, management's decision to exit the more volatile variable annuities (VA) and individual life businesses should help to reduce risk by making the company less vulnerable to swings in performance. Fitch expects HFSG to maintain a financial leverage ratio at or below 25% following the final successful execution of the company's strategic initiatives and any ultimate subsequent capital management actions. HFSG's financial leverage ratio (excluding AOCI on fixed maturities) increased to 26.8% at June 30, 2012 from 23.8% at Dec. 31, 2011, due to additional debt issued to redeem the company's 10% junior subordinated debentures investment by Allianz SE. HFSG's operating earnings-based interest and preferred dividend coverage has been reduced in recent years, averaging a low 3.4x from 2008 to 2011. This reflects both constrained operating earnings and increased interest expense and preferred dividends paid on capital over this period. Fitch expects HFSG's run-rate operating earnings-based interest and preferred dividend coverage to improve to at least 5.0x, with a reduced overall level of fixed charges. As the company completes its restructuring efforts, Fitch will review future capitalization plans and earnings capabilities, as well as capital needs in various run-off operations. Over the past two years, HFSG has significantly altered its business profile. The management of the new business profile and ultimate capital structure could influence Fitch's rating opinion. Fitch expects to assess these factors in the coming months as management plans become clear. Fitch maintains separate IFS ratings on HFSG's life and property/casualty companies that reflect each businesses respective stand-alone financial profile. Fitch considers the primary life insurance subsidiaries to be non-core as the life businesses are not considered to be a material strategic focus of the company. As such, the life insurance subsidiaries continue to receive an IFS rating of 'A-', reflecting their own combined financial profile. Upon the closing of the transactions, Fitch will review the ratings of the life insurance companies within the context of its group ratings methodology to consider differentiating the ratings of each life insurance entity based on its stand-alone profile or retaining its group approach for the life subsidiaries. Fitch expects that HFSG will continue to support its insurance subsidiaries and maintain insurance company capitalization that is consistent with the current ratings. The ratings for Hartford Life's operations reflect an adequate U.S. consolidated statutory capital position. While capital generation is expected to remain flat through 2012, Fitch expects consolidated U.S. life insurance to remain above the company's 325% RBC targets for its life operations and 125% for its VA captive operations. The key rating triggers that could result in an upgrade to HFSG's debt ratings include a financial leverage ratio maintained near 20%, maintenance of at least $1 billion of holding company cash, and interest and preferred dividend coverage of at least 6x. Continued success with the strategic plan and successful seasoning of run-off operations would also be considered favorably. Fitch considers a rating upgrade to be unlikely in the near term for HFSG's life and property/casualty insurance subsidiaries. The key rating triggers that could result in a downgrade include significant investment or operating losses that materially impact GAAP shareholders' equity or statutory capital within the insurance subsidiaries, particularly as they relate to any major negative surprises in the runoff VA business; a financial leverage ratio maintained above 25%; a sizable drop in holding company cash; failure to improve interest and preferred dividend coverage; and an inability to execute on the company's strategic plan. Fitch affirms the following ratings with a Stable Outlook: Hartford Financial Services Group, Inc. --Long-term IDR at 'BBB+'; --$320 million 4.625% notes due 2013 at 'BBB'; --$200 million 4.75% notes due 2014 at 'BBB'; --$300 million 4.0% senior notes due 2015 at 'BBB'; --$200 million 7.3% notes due 2015 at 'BBB'; --$300 million 5.5% notes due 2016 at 'BBB'; --$499 million 5.375% notes due 2017 at 'BBB'; --$325 million 4.0% senior notes due 2017 at 'BBB'; --$500 million 6.3% notes due 2018 at 'BBB'; --$500 million 6% notes due 2019 at 'BBB'; --$499 million 5.5% senior notes due 2020 at 'BBB'; --$800 million 5.125% senior notes due 2022 at 'BBB'; --$298 million 5.95% notes due 2036 at 'BBB'; --$299 million 6.625% senior notes due 2040 at 'BBB'; --$325 million 6.1% notes due 2041 at 'BBB'; --$425 million 6.625% senior notes due 2042 at 'BBB'; --$600 million 7.875% junior subordinated debentures due 2042 at 'BB+'; --$500 million 8.125% junior subordinated debentures due 2068 at 'BB+'; --$556 million 7.25% mandatory convertible preferred stock, series F at 'BB+'. Hartford Financial Services Group, Inc. --Short-term IDR at 'F2'; --Commercial paper at 'F2'. Hartford Life, Inc. --Long-term IDR at 'BBB'; --$149 million 7.65% notes due 2027 at 'BBB-'; --$92 million 7.375% notes due 2031 at 'BBB-'. Hartford Life Global Funding --Secured notes program at 'A-'. Hartford Life Institutional Funding --Secured notes program at 'A-'. Hartford Life and Accident Insurance Company --IFS at 'A-'. Hartford Life Insurance Company --IFS at 'A-'; --Medium-term note program at 'BBB+'. Hartford Life and Annuity Insurance Company --IFS at 'A-'. Members of the Hartford Fire Insurance Intercompany Pool: Hartford Fire Insurance Company Nutmeg Insurance Company Hartford Accident & Indemnity Company Hartford Casualty Insurance Company Twin City Fire Insurance Company Pacific Insurance Company, Limited Property and Casualty Insurance Company of Hartford Sentinel Insurance Company, Ltd. Hartford Insurance Company of Illinois Hartford Insurance Company of the Midwest Hartford Underwriters Insurance Company Hartford Insurance Company of the Southeast Hartford Lloyd's Insurance Company Trumbull Insurance Company --IFS at 'A+'. 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 (Sept. 19, 2012). Applicable Criteria and Related Research: Insurance Rating Methodology
* BA latest to be hit by computer problems (Adds comment by BA's chief executive)
May 27 General Motors Co said on Saturday that proxy advisory firm Institutional Shareholder Services has recommended that shareholders vote against a slate of directors proposed by hedge fund Greenlight Capital and reject the hedge fund's plan to divide GM shares into two classes.
LONDON, May 27 British Airways said a power supply issue was to blame for a global computer system failure which sowed confusion and chaos at London's two biggest airports, with thousands of passengers queuing for hours and planes left stuck on runways.