Swiss Re ratings unaffected by Guardian deal: Moody’s

Moody’s has said that Swiss Re’s ratings have been unaffected after the firm’s business unit Admin Re agreed to buy Guardian Financial Services for £1.6 billion.

The rating agency said that although the proposed acquisition will reduce the capitalisation of the group under Swiss Solvency Test (SST), it will remain “well above the company risk tolerance level” (over 185 percent) and it said the leverage of the group will only slightly increase.

The acquisition will be financed with both excess cash on balance sheet and debt.

The cash generation of Admin Re is expected to increase by $1 billion to $1.7 billion in the next three years and the transaction is expected to be accretive from year one.

It is predicted that the deal will be completed in early 2016, following regulatory approval.

As a result of the acquisition, Admin Re will further diversify its current business in the UK.