Fitch Affirms Protective Life’s Ratings; Outlook Stable

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed Protective Life Corporation's (PL) Issuer Default Rating (IDR) at 'A-' and senior debt ratings at 'BBB+'. Fitch has also affirmed the Insurer Financial Strength (IFS) ratings of PL's primary life insurance subsidiaries at 'A'. The Rating Outlook is Stable. A full ratings list follows at the end of this release.

KEY RATING DRIVERS

Fitch's rating action follows the agency's revision of Dai-ichi Life Insurance Company, Ltd.'s (Dai-ichi Life: 'A' IFS) Rating Outlook to Negative (see "Fitch Revises Outlooks on 11 Japanese Insurers to Negative" dated 16 June 2016 at www.fitchratings.com). This action follows a revision of the Rating Outlook for Japan to Negative.

Fitch would allow PL's IFS rating to be rated one notch above its parent, due to its strong standalone credit profile and lack of direct exposure to Japan and issues constraining its sovereign rating, including not having any direct investments in Japanese government bonds. Therefore, if Japan is downgraded by one notch, Fitch expects PL's ratings to be unaffected.

Fitch views PL's standalone credit profile as in line with an 'A' IFS rating, which reflects the company's strong operating profile, consistent financial performance, solid debt service capability and relatively low investment risk. The ratings also reflect strong balance sheet fundamentals based on PL's solid risk-based capitalization and above-average total leverage driven by reserve funding arrangements.

RATING SENSITIVITIES

PL's ratings will likely be affirmed if Japan is downgraded by one notch.

PL's holding company ratings are somewhat constrained by Dai-ichi Life's ratings, which are capped by Japan's Long-Term Local-Currency IDR rating of 'A'. Given that Dai-ichi Life's ratings have a Negative Outlook, an upgrade of PL is unlikely in the near term.

Fitch has affirmed the following ratings with a Stable Outlook:

Protective Life Corporation

--IDR at 'A-';

--$150 million of 6.40% senior notes due 2018 at 'BBB+';

--$400 million of 7.38% senior notes due 2019 at 'BBB+';

--$300 million of 8.45% senior notes due 2039 at 'BBB+';

--$288 million of 6.25% subordinated debt due 2042 at 'BBB-';

--$150 million of 6.00% subordinated debt due 2042 at 'BBB-'.

Protective Life Insurance Company

Protective Life and Annuity Insurance Company

West Coast Life Insurance Company

MONY Life Insurance Co.

--IFS at 'A'.

Additional information is available on www.fitchratings.com.

Applicable Criteria

Insurance Rating Methodology (pub. 17 May 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=881564

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1006151

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1006151

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160616005912/en/

Fitch Ratings

Primary Analyst

Dafina M. Dunmore, CFA

Director

+1-312-368-3136

Fitch Ratings, Inc.

70 W. Madison Street

Chicago, IL 60602

or

Secondary Analyst

Douglas L. Meyer, CFA

Managing Director

+1-312-368-2061

or

Committee Chairperson

Don Thorpe, CFA

Senior Director

+1-312-606-2353

or

Media Relations:

Hannah James, New York, + 1 646-582-4947

Email: [email protected]

Source: Fitch Ratings