Moody's lowers Saga view to negative

Moody's Investors Service said it affirmed Saga plc's Ba1 corporate family rating, Ba1-PD probability of default rating and Ba1 backed senior unsecured debt rating.

The outlook was revised to negative from stable.

The outlook revision reflects elevated execution risk associated with the group's strategy to grow its insurance brokering and travel businesses to offset the expected material deterioration in revenue and earnings over the next two years, Moody's said.

Given these profitability challenges, the negative outlook also reflects the risk that Saga's leverage will remain above expectations for the current rating level for a prolonged period, the agency said.

Over the coming 12- to 24-months, Moody's said it expects a meaningful reduction in the group's earnings, primarily driven by a significant decline in prior year reserve releases in Saga's underwriting business.

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