Fitch Ratings has assigned a rating of 'BBB' to
The ratings previously assigned to Jackson and its insurance operating subsidiaries are unaffected by today's rating action.
Key Rating Drivers
The notes have been assigned a rating one notch below Jackson's (BBB+/Stable) Long-Term Issuer Default Rating, which reflects standard notching as described in Fitch's insurance rating criteria.
Jackson's announced senior unsecured note issuance reflects a meaningful step in Jackson's recapitalization plans following its separation from
Jackson's debt service capabilities will remain strong, and the company's anticipated GAAP based fixed-charge coverage is expected to exceed rating expectations.
Proceeds from the notes will be used to retire the company's outstanding 2022 term loan, the proceeds of which were contributed to its primary operating subsidiary
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Significant diversification of Jackson's liability profile;
Improved capital metrics for Jackson, as measured by a Prism capital score consistently above 'Strong'.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
An increase in the degree of reported financial performance volatility driven by equity market volatility, a low-for-long interest rate environment and broader macroeconomic-related headwinds;
A decline in Jackson's Prism capital-model output consistently below 'Strong', along with declines in reported risk-based capital ratio and profitability;
Financial leverage consistently in excess of 25%;
Fixed charge coverage that consistently falls below 7.0x;
Unexpected economic or operational disruptions as a result of Jackson's transition to a standalone company.
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 '
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg.
RATING ACTIONS
Entity / Debt
Rating
senior unsecured
LT
BBB
New Rating
Page
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VIEW ADDITIONAL RATING DETAILS
Additional information is available on www.fitchratings.com
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