Sagicor Life has again been downgraded by Standard and Poor’s (S&P) just weeks after the international rating agency took similar action against Barbados.
The agency said it decided to lower the Barbados-based company’s rating from ‘BB+’ to ‘BB-’.
It said the rating on Sagicor Finance Ltd’s US$150 million, 10-year senior unsecured notes was also being lowered to ‘B’ from ‘BB-’.
“Although Sagicor passes our default stress scenario for Barbados, we cap the ratings at two notches above the country of domicile due to our view that Sagicor has high country risk sensitivity,” S&P said, though it noted that the company had ‘moderately strong’ capitalization, improving operating performance, and an ‘adequate’ competitive position”.
“The negative outlook reflects that of Barbados, because, in our view, ratings on life insurers are capped at two notches above the sovereign rating of the country of domicile considering our view of the critical role of regulations and funding for the insurer and provided that it passes our sovereign default stress test,” it added.
On December 19, 2014, the United States agency lowered Barbados’ sovereign rating to ‘B’ from ‘BB-.’