Fitch assigns Aviva Singlife notes BBB-

Fitch Ratings said it assigned Aviva Singlife Holdings Pte. Ltd. a long-term issuer default rating of BBB+ with a stable outlook and a BBB- rating to its planned regulatory compliant tier 2 subordinated securities.

“ASH’s long-term IDR is derived from Fitch’s assessment of the insurer financial strength (IFS) rating of its proposed key operating entity, Aviva Singlife. ASH, a newly established holding company, will own 100% of the proposed Aviva Singlife, which will be formed from the merger of Singapore Life Pte. Ltd. and Aviva Ltd. The ratings are based on our expectation the merger will be completed, with all the required approvals from the various authorities, including regulatory and court, by 2021,” Fitch said in a press release.

Fitch said it rates the securities two notches below ASH’s IDR to reflect Fitch’s assumption of poor recovery prospects in the event of a default, given the subordination level.

The notes will have a tenor of 10.25 years and are callable after 5.25 years.

Net proceeds will be used for funding the acquisition and capital-adequacy purposes.

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