Fitch rates TAM Finance AA-

Fitch Ratings said it assigned an AA- issuer default rating to TAM Finance Co., LLC, a new subsidiary holding company of Teachers Insurance and Annuity Association of America (TIAA) formed to hold the equity interests in Nuveen Investments, Inc. and its subsidiaries.

Fitch also said it affirmed all of the existing ratings assigned to TIAA and its affiliates.

The outlook is stable.

The rating follows news that TIAA has completed the acquisition of Nuveen Investments, Inc. in a transaction valued at $6.25 billion, Fitch said.

The AA- issuer default rating assigned to TAM Finance is based on support from TIAA, the agency said, and reflects standard notching based on a view that Nuveen is a strategically important subsidiary of TIAA.

Nuveen's strategic importance considers TIAA’s full ownership and potential synergies providing products and services in markets that are strategically important to TIAA, including the mutual fund, asset management and retirement-services markets, the agency said.

Fitch said it believes the Nuveen transaction provides a strong complement to TIAA’s existing asset management platform, significantly strengthens TIAA’s third party distribution capabilities and could potentially enhance the company’s market-leading position in the retirement market.

Key rating concerns include the integration of Nuveen, increased leverage and decreased interest coverage over the medium term, Fitch said, along with the impact of ongoing low interest rates.

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