Risk Rating Agencies Confirm Grupo Security's Rating
Following Grupo Security's announcement regarding its acquisition of the Cruz del Sur companies, risk rating agencies Fitch Ratings and Feller Rate assigned Grupo Security “A+(cl)/ A+” ratings. Both agencies highlighted the credit quality of the Security companies' investment portfolios, their diversified revenue and the conservative criteria that the group has traditionally applied in issuing debt.
After Grupo Security announced that it had signed a promissory contract to acquire the Cruz del Sur companies, owned by Grupo Angelini through Inversiones Siemel S.A., the risk rating agencies Fitch Ratings and Feller Rate assigned Grupo Security “A+(cl)/ A+” ratings.
Fitch Ratings stressed that the deal does not impact the financial group's rating since its post-transaction leverage and debt structure should not place significant pressure on the Group's current ability to pay its debt.
“The entity's investments are of high credit quality and its financial assets are low risk. In fact, around 90% of its consolidated assets are in regulated sectors and its subsidiaries have high risk ratings: Banco Security and subsidiaries (AA-(cl)), Seguros de Vida Security Previsión (AA-(cl)), and its 29.35% stake in Seguros Generales Penta Security (A+ (cl)). The entity also has controlling interests in subsidiaries in the factoring, insurance brokerage, reinsurance brokerage, real estate development, travel and tourism industries,” highlighted Fitch.
Feller Rate confirmed Security's solvency and maintained its “Stable” outlooks, assigning a ”creditwatch under development” rating to Seguros de Vida Security Previsión S.A. and Compañía de Seguros de Vida Cruz del Sur S.A., both rated as “AA-”. Feller also pointed out that, “through the transaction, Grupo Security S.A. will increase its scale and market position in its traditional insurance and third-party asset management businesses. Meanwhile, it also hopes to strengthen its product offering and obtain benefits from a series of synergies.” The rating agency also remarked that the greatest impact on assets will be from the acquisition of Cruz del Sur Seguros de Vida S.A., which will double the Group's insurance assets.
The “Stable” outlook assigned to Grupo Security by Feller is due to the credit quality of its investment portfolio and its current plans to increase cross-sales with present customers and diversify revenue sources, which should give it larger, more stable returns. The entity continues to consolidate its plans to strengthen several commercial and control divisions, which is necessary to successfully implement its strategy. The acquisition of the Cruz del Sur companies should continue to contribute to its strategic plan by increasing scale, leveraging synergies and diversifying its businesses.