S&P: Liberty Mutual still on watch

Standard & Poor's said the BBB counterparty credit rating on Liberty Mutual Group Inc. remains on CreditWatch, where it was placed on April 23 with negative implications.

The watch followed Liberty's definitive agreement to purchase Safeco Corp. for about $6.2 billion in cash.

S&P said the acquisition of Safeco for about 1.8 times its book value will result in a significant decline in Liberty's capital adequacy because statutory capital will be reduced by the substantial amount of goodwill and higher capital charges because of the consolidation of Safeco's assets and liabilities onto Liberty's balance sheet.

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