INTACT FINANCIAL CORPORATION
Fitch Ratings has assigned
No rating actions have been taken on Intact's existing ratings.
Key Rating Drivers
The rating for the preferred shares is equivalent to the rating on IFC's existing preferred shares. Under Fitch's hybrid methodology, IFC's non-cumulative preferred shares receive 100% equity credit.
The proceeds will be used to fund a portion of the redemption price of floating rate restricted notes of the company's recently acquired subsidiary,
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Successful integration of acquired business into IFC with minimal deviations from assumptions could lead to an upgrade. Integration efforts would be measured 36 months after close of the transaction;
Sustained fixed-charge coverage ratio of 11.5x or higher.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Failure to successfully integrate acquired business into IFC could lead to a downgrade;
Sustained increase in financial leverage of 28% or higher;
Sustained reduction in fixed-charge coverage below 5.0x;
The RSA ratings remain sensitive to changes in strategic importance. At current Very Important level, should the standalone credit profile deteriorate three to five notches below the group credit profile, RSA ratings could be downgraded one notch.
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
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