S&P Lowers Hartford's Ratings to 'A-'; On CreditWatch Negative
Source: Standard & Poor's
February 10, 2009
Standard & Poor's Ratings Services has lowered its counterparty credit rating on Hartford Financial Services Group (HIG) to 'A-' from 'A'. S&P also placed its ratings on HIG and its operating subsidiaries (collectively referred to as Hartford) on CreditWatch with negative implications.
"These rating actions reflect deteriorating business and macroeconomic conditions, which are increasing strain on the group by eroding earnings and pressuring capitalization," said S&P.
"Because of the sharply lower equity markets, Hartford's earnings from equity-linked products have decreased, and actual and potential reserve and capital requirements have increased," noted credit analyst Robert A. Hafner. "Compounding these pressures are concerns that investment losses could increase beyond expectations for the ratings unless general economic conditions stabilize." HIG is now rated the standard three notches below its operating companies.
S&P said it expects to resolve the CreditWatch status of the ratings within one month, "following further review of Hartford's investment exposures, capital needs, and earnings prospects. We will likely either affirm the ratings on Hartford and assign a negative outlook or lower the ratings by one notch."
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