Fitch downgrades Aflac

Fitch Ratings said it downgraded Aflac Inc.'s issuer default rating to A+ from AA- and senior debt rating to A from A+.

The ratings remain on Rating Watch negative.

The agency said the rating actions reflect its heightened concern related to potential impairments within Aflac's sizable financial institution perpetual debenture asset portfolio. As of Dec. 31, Aflac reported a book value of about $9 billion invested in perpetual debenture assets compared with $6.6 billion in GAAP shareholders' equity and $4.6 billion in statutory total adjusted capital. Fitch said that if impairments do materialize, the result could substantially weaken Aflac's capital position.

The agency said it continues to recognize the company's otherwise very strong balance sheet that includes low financial leverage, high regulatory capital quality and an otherwise clean asset portfolio.

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