THE FALLOUT from Standard & Poor’s (S&P) latest downgrade of Barbados’ sovereign rating has started, with a leading insurer the first major casualty.
Senior officials of longstanding insurer Sagicor Life Inc were yesterday grappling with the news that S&P had lowered its rating from ‘BB+’ to ‘BB-’ largely because of the company’s
“high country risk sensitivity”.
Sagicor Finance Limited’s US$150 million, ten-year senior unsecured notes were also downgraded from ‘BB-’ to ‘B’ and – like Barbados – the insurer was given a negative outlook.
“Although the company passes our default stress scenario for this country, a life insurer rating is capped at two notches above the sovereign rating of its country of domicile considering our view that life insurers have a high sensitivity to country risk and the critical role of regulations and funding for these entities,” S&P’s credit analyst Jose Perez-Gorozpe said in a statement accompanying the rating action. (SC)
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