In a notice to the TASE today, Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), a subsidiary of IDB Holding Corp. Ltd. (TASE:IDBH), controlled by Nochi Dankner, says that has no intention of selling subsidiary Clal Finance Ltd., and that it intends to inject NIS 50 million into the company during 2013 to help it handle its debts.
Today's announcement came after Midroog Ltd. yesterday reiterated its Aa1 credit rating for Clal Insurance and its Aa2 rating for the company's deferred notes with a "Negative" outlook. Midroog said that the "Negative" outlook was due to the higher credit risk for IDB, its need for larger dividends from Clal Insurance, and IDB's weaker ability to inject capital into Clal Insurance, if necessary.
Earlier this month, Standard & Poor's Maalot Ltd. downgraded its credit rating for Clal Insurance from AA+ to AA. Maalot said that the completion of Clal Insurance's sale of US subsidiary Guard Insurance Group, and the way Clal Insurance used the proceeds would affect its ability to meet its liabilities in 2013.
Maalot said that Clal Insurance's exposure to extended longevity, along with Israel's other large insurance companies, was liable to result in further downgrades of the company. This implies that there will be more downgrades of other large insurance companies, which have greater exposure to life insurance.
Maalot also reiterated its BBB+ rating for Clal Finance with a "Negative" outlook.
Published by Globes [online], Israel business news - www.globes-online.com - on October 29, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012