Income Insurance's ratings placed on "CreditWatch negative"
https://www.asiainsurancereview.com...e-on-potential-dilution-of-government-supportS&P has placed its 'AA-' long-term local-currency insurer financial strength and issuer credit ratings on Income Insurance on CreditWatch with negative implications. The rating on Income Insurance is two notches above S&P’s assessment of the insurer’s stand-alone credit profile. This is owing to the insurer's sustained strong relationship with the Singapore government.
At the same time, S&P placed its 'A' long-term issue rating on Income Insurance's Singapore-dollar callable subordinated notes on CreditWatch negative.
S&P said, “The CreditWatch placement reflects our view of the high uncertainty surrounding potential changes to Income Insurance's shareholding structure. On 14 June 2024, Income Insurance announced that it is in discussions for a potential shareholding transaction with Allianz SE. Income Insurance has not disclosed any further information on potential changes to its shareholding structure and the impact on management and control post the transaction.
“Given the uncertainty surrounding the transaction, we do not consider group support from Allianz SE at this moment.”
S&P said, “We believe this potential privatisation showcases the government's intention to dilute its shareholding in Income Insurance. Such a move could lead to a gradual decrease in the likelihood of support.
The CreditWatch placement reflects the possibility of a decline in extraordinary support from the Singapore government to Income Insurance through NTUC Enterprise post the shareholding transaction.
S&P also said, “We aim to resolve the CreditWatch placement over the next 90 days, or longer. We will wait for more clarity on Income Insurance major shareholder's intention, the transaction plan, and how it will affect the management or control of the insurer.”
At the same time, S&P placed its 'A' long-term issue rating on Income Insurance's Singapore-dollar callable subordinated notes on CreditWatch negative.
S&P said, “The CreditWatch placement reflects our view of the high uncertainty surrounding potential changes to Income Insurance's shareholding structure. On 14 June 2024, Income Insurance announced that it is in discussions for a potential shareholding transaction with Allianz SE. Income Insurance has not disclosed any further information on potential changes to its shareholding structure and the impact on management and control post the transaction.
“Given the uncertainty surrounding the transaction, we do not consider group support from Allianz SE at this moment.”
S&P said, “We believe this potential privatisation showcases the government's intention to dilute its shareholding in Income Insurance. Such a move could lead to a gradual decrease in the likelihood of support.
The CreditWatch placement reflects the possibility of a decline in extraordinary support from the Singapore government to Income Insurance through NTUC Enterprise post the shareholding transaction.
S&P also said, “We aim to resolve the CreditWatch placement over the next 90 days, or longer. We will wait for more clarity on Income Insurance major shareholder's intention, the transaction plan, and how it will affect the management or control of the insurer.”
