Fitch Ratings expects to assign the following rating to Great-West
Lifeco's (TSE:GWO) planned issuance:
--C$200 million Series Q, non-cumulative first preferred shares 'BBB+'.
The new shares' rating will be equivalent to the ratings on GWO's
existing preferred shares. Under Fitch's hybrid methodology, GWO's
non-cumulative preferred shares receive 100% equity credit. Fitch
anticipates that the net proceeds will be used for general corporate
purposes and to augment the company's current liquidity position. The
offering is expected to close July 6, 2012.
At March 31, 2012 GWO's financial leverage was 23% and GAAP
earnings-based interest and preferred dividend coverage was
approximately 6x. Pro forma financial leverage, including the previously
announced redemption of the Series A CLiCs on June 30, 2012, decreases
to approximately 22%.
On June 25, 2012, Fitch affirmed all of its ratings for GWO and GWO's
subsidiaries with a Stable Outlook.
Fitch currently rates the GWO entities as follows:
Great-West Lifeco, Inc.
--Long-term IDR at 'A+';
--6.14% senior debentures due March 21, 2018 'A';
--4.65% senior debentures due Aug. 13, 2020 'A';
--6.74% senior debentures due Nov. 24, 2031 'A';
--6.67% senior debentures due March 21, 2033 'A';
--5.998% senior debentures due Nov. 16, 2039 'A';
--Series F, 5.9% non-cumulative first preferred shares 'BBB+';
--Series G, 5.2% non-cumulative first preferred shares 'BBB+';
--Series H, 4.85% non-cumulative first preferred shares 'BBB+';
--Series I, 4.5% non-cumulative first preferred shares 'BBB+';
--Series J, 6% non-cumulative first preferred shares 'BBB+';
--Series L, 5.65% non-cumulative first preferred shares 'BBB+';
--Series M, 5.80% non-cumulative first preferred shares 'BBB+';
--Series N, 3.65% non-cumulative first preferred shares 'BBB+';
--Series P, 5.4% non-cumulative first preferred shares 'BBB+'.
GWL&A Financial Corp.
--Long-term IDR 'A+'.
Canada Life Financial Corporation
Great-West Life Assurance Company
--Long-term IDR 'AA-'.
Canada Life Assurance Company
--Long-term IDR 'AA-';
--6.4% subordinated debentures due Dec. 11, 2028 'A+'.
Great-West Life and Annuity Insurance Company
--Short-term IDR 'F1+';
--Commercial paper 'F1+'.
London Life Insurance Company;
First Great-West Life & Annuity Insurance Company
Great-West Lifeco Finance (Delaware) LP
--5.691% subordinated debentures due 2067 'BBB+';
--7.127% subordinated debentures due 2068 'BBB+'.
Great-West Life & Annuity Insurance Capital, LP
--6.625% deferrable debentures due Nov. 15, 2034 'BBB+'.
Great-West Life & Annuity Insurance Capital, LP II
--7.153% subordinated debentures due 2046 'BBB+'.
Great-West Life Capital Trust
--Series A, 5.995% senior debentures due Dec. 31, 2052 'A'.
Canada Life Capital Trust
--Series A, 6.679% senior debentures due June 30, 2052 'A';
--Series B, 7.529% senior debentures due June 30, 2052 'A'.
Additional information is available at 'www.fitchratings.com'.
The ratings above were solicited by, or on behalf of, the issuer, and
therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Insurance Rating Methodology', dated Sept. 22, 2011.
Insurance Rating Methodology
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Fitch RatingsPrimary Analyst:Tana M. Higman, +1-312-368-3122DirectorFitch,
Inc.70 W. Madison StreetChicago, IL 60602orSecondary
Analyst:R. Andrew Davidson, CFA, +1-312-368-3144Senior
DirectororCommittee Chairperson:Douglas M. Pawlowski,
CFA, +1-312-368-2054Senior DirectororMedia Relations:Brian
Bertsch, +1-212-908-0549 (New York)email@example.com
Source: Fitch Ratings