Fitch Affirms Voya’s Ratings; Outlook Stable
The affirmation reflects Voya's balance sheet strength and ample debt servicing capacity. Voya's ratings also reflect the large-scale and solid business profile in retirement, employee benefits and universal life markets, improved operating performance within its core businesses, and conservative investment portfolio. Offsetting these positives are the challenges related to the run-off of Voya's
KEY RATING DRIVERS
During the first half of 2016 (IH16), Voya reported pre-tax operating income of
While Voya expects operating income to improve, operating ROE will continue to be impacted by the significant amount of capital supporting the closed-block
GAAP adjusted operating earnings-based interest coverage was 5.5x in 1H16, down from 7.0x in full-year 2015. Based on estimated ordinary statutory dividend capacity of
At
Fitch considers Voya's aggregate capitalization, including captives, to be strong for the current rating level. The consolidated risk-based capital (RBC) ratio for the company's
Fitch's key rating concerns include the challenges related to the run-off of Voya's
RATING SENSITIVITIES
The key rating triggers that could result in an upgrade include:
--Continued growth in operating profitability which leads to an improvement in operating ROE to over 11%;
--Sustained maintenance of GAAP adjusted operating earnings-based interest coverage of more than 10x;
--Private sale of closed-block book at good value with boost to capitalization and reduction in volatility and risk;
--Reported RBC above 450%, and financial leverage below 20%.
The key rating triggers that could result in a downgrade include:
--A decline in reported RBC below 375%;
--Financial leverage exceeding 30%;
--Significant adverse operating results which leads to GAAP adjusted operating earnings-based interest coverage below 6x;
--Sustained decline in operating ROE below 6%;
--Material reserve charges required in its insurance/variable annuity books.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings with a Stable Outlook:
Voya Financial, Inc.
--Long-Term IDR at 'BBB+';
--5.5% senior notes due
--2.9% senior notes due
--3.65% senior notes due
--5.7% senior notes due
--4.8% senior notes due
--5.65% fixed-to-floating junior subordinated notes due
--IFS at 'A'.
--Long-term IDR at 'BBB+'.
--8.424% Trust Preferred Stock at 'BB+'.
--
--7.25% senior notes due
--7.625% senior notes due
--6.97% senior notes due
Additional information is available on www.fitchratings.com
Applicable Criteria
Insurance Rating Methodology (pub.
https://www.fitchratings.com/site/re/887191
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1011950
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1011950
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
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