Moody’s Investors Service today downgraded the senior debt rating of insurer Phoenix Cos. due to its declining capital.
It was the second downgrade for the Hartford insurer in the last month. In August S&P cut credit ratings for Phoenix and several of its subsidiaries a day after the company reported a $111 million loss for the second quarter on declining sales.
Moody’s downgraded the company’s senior debt rating to “B1” from “Ba2,” a junk-bond status that indicates the future of the bonds can’t be well assured.
Moody’s said in a statement the outlook is negative, reflecting “the challenges that management faces in maintaining the company’s liquidity position without overly compromising investment earnings, the pace of negative cash flows from the company’s in-force block, as well as concerns about the ability of the company to stabilize and improve its capital position given its weak earnings capacity.”
Moody’s also cut the insurance financial strength rating of the company’s life insurance subsidiaries, led by Phoenix Life Insurance Company, has been lowered to “Ba1” from “Baa2.” “Ba1” is also a junk-bond rating.
Shares fell 11 cents to $2.62 during afternoon trading.
In Aug. Phoenix Cos. CEO James D. Wehr said Standard & Poor’s was “excessive and precipitous” in downgrading its credit ratings and outlook. (AP)
