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| S&P Puts Allianz on Watch Neg; Dresdner on Watch Developing |
LONDON, March 30 /PRNewswire/ -- Standard & Poor's today placed on
Creditwatch with negative implications the long-term ratings on Munich-based
Allianz AG and various related entities. At the same time, Standard & Poor's
placed on Creditwatch with developing implications the ratings on Dresdner
Bank AG and related entities. (See list below.)
These rating actions are in response to yesterday's confirmation by both
groups that they are in strategic talks regarding the creation of an
integrated financial services group. At the same time, the 'A-1'-plus
short-term ratings on Allianz units were affirmed.
Allianz would benefit from linking up with Dresdner with regard to its
position in asset management and retail funds, and its asset quality. Allianz
already ranks among the top-eight asset managers worldwide, with funds under
management of EUR700 billion. Dresdner manages almost EUR300 billion of funds
and so would considerably boost the size and prominence of Allianz Asset
Management, as well as broadening its skill set. Furthermore, Dresdner
subsidiary Deutscher Investment Trust is one of the leading German mutual fund
managers and would enhance Allianz's existing plans to build a significant
presence in retail financial services in Germany and other European markets.
If Allianz were to acquire Dresdner, it is expected that it would dispose
of several of its large shareholdings in German financial and industrial
companies, thereby improving the quality of Allianz's asset portfolio.
Offsetting these benefits, however, Dresdner's operating performance, market
position, and capitalization are all weaker than those of Allianz. In a
combined group, Dresdner would constitute about one-third, based on estimated
2000 earnings. Consequently, the rating profile of a combined group would
likely be weaker than that of Allianz currently. Moreover, any goodwill paid
for Dresdner, together with the capital requirements of the banking
operations, would dilute Allianz's capital base substantially, unless
sufficient fresh equity capital were raised to cover this. Therefore, in the
event of such a transaction taking place, the triple-'A' counterparty credit
and insurer financial strength ratings on Allianz would probably be lowered.
Dresdner is already an important distributor of Allianz life and pensions
products in many parts of Germany, and its significance would increase
considerably if the two groups were to amalgamate. Furthermore, Allianz is
keen to diversify from insurance into broader financial services.
Consequently, if such a transaction were to proceed, then Dresdner would be
regarded as strategically important to Allianz and its rating could be raised
to reflect implicit support from Allianz.
The final rating outcomes will, to some extent, depend on the proposed
format and speed of the integration plans and the proposed legal and
management structures.
The ratings on all parties will be finalized either when a transaction is
completed, or when it becomes clear that such a transaction is not going
ahead. In the latter circumstance, the ratings on Dresdner Bank could be
lowered, as this would likely further impair Dresdner's franchise and risk
profile, which already suffered from the failed merger attempts with Deutsche
Bank AG and Commerzbank AG in 2000, Standard & Poor's said. -- CreditWire
RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS
Allianz AG
Long-term counterparty credit rating AAA
Financial strength rating AAA
Senior unsecured debt AAA
Allianz Versicherungs AG
Frankfurter Vers. AG
Bayerische Versicherungsbank AG
Vereinte Versicherung AG
Allianz Lebensversicherungs AG
Vereinte Lebensversicherung AG
Vereinte Krankenversicherung AG
AGF - Assurances Generales de France Vie
AGF - Assurances Generales de France Incendie Accidents Reassurances
Transport
AGF - Assurances Generales de France Marine Aviation Transport (AGF-MAT)
R.A.S. - Riunione Adriatica di Sicurta SpA
Allianz Elementar Versicherungs - AG
Allianz Elementar Lebensversicherungs AG
Allianz Insurance Co.
Allianz Underwriters Insurance Co.
Allianz Life Insurance Co. North America
Preferred Life Insurance Co. of NY
Counterparty credit rating AAA
Financial strength rating AAA
Allianz Finance B.V.
Senior unsecured debt (Gtd: Allianz AG) AAA
Allianz Finance II B.V.
Senior unsecured debt (Gtd: Allianz AG) AAA
AGF - Assurances Generales de France
Counterparty credit rating AA+
Junior subordinated debt AA-
RATINGS PLACED ON CREDITWATCH WITH DEVELOPING IMPLICATIONS
Dresdner Bank AG
Counterparty credit ratings AA-/A-1+
Senior unsecured debt AA-
Short-term debt A-1+
Commercial paper A-1+
CD program AA-/A-1+
Subordinated debt A+
Dresdner U.S. Finance Inc.
Short-term counterparty credit ratings A-1+
CD program A-1+
Commercial paper* A-1+
*Support from Dresdner Bank AG (Cayman Islands Branch)
Dresdner Capital LLC I
Dresdner Capital LLC II
Dresdner Capital LLC III
Dresdner Capital LLC IV
Dresdner Funding Trust I
Dresdner Funding Trust II
Dresdner Funding Trust III
Dresdner Funding Trust IV
Junior suborbdinated debt A
Dresdner Finance B.V.
Senior unsecured debt (Gtd: Dresdner Bank AG) AA-
Short-term debt (Gtd: Dresdner Bank AG) A-1+
Subordnated debt (Gtd: Dresdner Bank AG) A+
OUTSTANDING RATINGS AFFIRMED
Allianz AG
Short-term counterparty credit rating A-1+
Commercial paper A-1+
AGF - Assurances Generales de France
Short-term counterparty credit rating A-1+
Allianz of America, Inc.
Short-term counterparty credit rating A-1+
Commercial paper A-1+
AGF - Assurances Generales de France CASH (SNC)
Commercial paper A-1+
(Guaranteed by AGF - Assurances Generales de France)
SOURCE Standard & Poor's
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CONTACT:
Martin Lees, London, 44-20-7847-7048,
Christian Dinesen, London, 44-20-7847-7043, Michael Zlotnik,
Frankfurt, 49-69-138709-7318, or Stefan Best, Frankfurt,
49-69-138709-7316, all of Standard & Poor's
