AM Best comments on the credit ratings of Great-West Lifeco Inc. and its subsidiaries following the announcement of the acquisition of the retirement business of Prudential

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OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best indicated that the credit ratings (ratings) of Great-West Lifeco Inc. (Lifeco) and its subsidiaries remain unchanged following the July 21, 2021 announcement that its U.S. subsidiary, Empower Retirement (legally known as Great West Life & Annuity Insurance Company) has entered into a definitive agreement to acquire the full retirement business of Prudential Financial, Inc. (Prudential) for approximately 4.45 billion CAD (3.55 billion USD).

Lifeco expects to finance the acquisition with approximately $ 1.15 billion of limited recourse bonds and $ 1.0 billion of short-term debt, in addition to existing resources. While Lifeco’s leverage will initially increase to just over 30%, AM Best expects the leverage and interest coverage ratios to improve relatively quickly, as the acquisition is expected to be immediately accretive to profits and short-term loans will be repaid. AM Best notes that Empower Retirement has a favorable track record of successfully acquiring and integrating past acquisitions and that the acquisition of Prudential’s retirement business will significantly increase the scale and market share of the Company. company in the full-service retirement space.

This press release relates to credit ratings published on the AM Best website. For all rating information relating to the publication and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this publication, please see AM Best’s Recent Rating Activity webpage. . For more information on the use and limitations of credit rating reviews, please see Best’s Guide to Credit Ratings. For more information on the proper use of Best Credit Ratings, Best Preliminary Credit Ratings, and AM Best press releases, please see the Guide to Appropriate Use of Best Ratings and Ratings.

AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. Based in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by AM Best Rating Services, Inc. and / or its affiliates. ALL RIGHTS RESERVED.


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