Market Overview

Fitch Rates Pacific LifeCorp's $500MM Senior Debt Offering 'BBB+'

CHICAGO--(BUSINESS WIRE)--

Fitch Ratings has assigned a 'BBB+' rating to Pacific LifeCorp's (PLC) $500 million 5.125% senior notes issuance due Jan. 30, 2043.

The new issue rating is equivalent to the ratings on PLC's existing senior debt. The net proceeds will be used to fund the company's previously announced cash tender offer to purchase $323 million of Pacific Life Insurance Company's 9.25% surplus notes due 2039.

At Sept. 30, 2012, PLC's financial leverage was approximately 22% and GAAP earnings-based interest coverage was approximately 8x. Pro forma financial leverage increases to approximately 23%.

On Oct. 11, 2012, Fitch affirmed all of its ratings for PLC and PLC's subsidiaries with a Stable Outlook.

Fitch currently rates the PLC entities as follows:

Pacific LifeCorp

--Long-term Issuer Default Rating (IDR) 'A-';

--$450 million 6% senior notes due 2020 'BBB+';

--$600 million 6.6% senior notes due 2033 'BBB+'.

Pacific Life Insurance Company

--Long-term IDR at 'A';

--Insurer Financial Strength (IFS) 'A+';

--$150 million 7.9% surplus notes due 2023 'BBB+';

--$677 million 9.25% surplus notes due 2039 'BBB+';

--Short-term IDR 'F1';

--Commercial paper 'F1'.

Pacific Life & Annuity Company

--IFS 'A+'.

Pacific Life Re Limited

--IFS 'A+'.

Pacific Life Funding, LLC

--Funding agreement-backed note program 'A+'.

Pacific Life Global Funding

--Funding agreement-backed note program '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' (Jan. 11, 2013).

Applicable Criteria and Related Research:

Insurance Rating Methodology -- Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=698731

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Fitch Ratings
Primary Analyst
Tana M. Higman, +1-312-368-3122
Director
Fitch, Inc.
70 West Madison Street
Chicago, IL 60602
or
Secondary Analyst
Julie A. Burke, CPA, CFA, +1-312-368-3158
Managing Director
or
Committee Chairperson
Brian C. Schneider, CPA, CPCU, +1-312-606-2321
Senior Director
or
Media Relations
Brian Bertsch, New York, +1-212-908-0549
brian.bertsch@fitchratings.com

 

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