Moody's: Liberty Mutual view negative

Moody's Investors Service said it affirmed the debt ratings of Liberty Mutual Group Inc. and its subsidiaries after the company said it agreed to acquire Safeco Corp. for $6.2 billion.

The outlook was changed to negative from stable.

According to Moody's, the ratings were affirmed because the acquisition represents a sound strategic move for Liberty Mutual that will further strengthen the group's Agency Markets franchise and its presence in the California and Pacific Northwest regions, as well as in surety, and that will bring further balance between the group's commercial and personal lines operations.

The agency also said it believes the limited geographic and agency overlap of the two companies' operations should help to both enhance the combined group's operational platform and to mitigate integration risks post-acquisition.

Moody's said the outlook change is primarily driven by the decrease in Liberty Mutual's financial flexibility and capital adequacy measures that will result from the significant use of internal resources to finance the acquisition.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.