S&P Says Pohjola Ratings ‘Unchanged’

March 8, 2007

Standard & Poor’s Ratings Services announced that its ratings and outlook on Finland’s Pohjola Non-Life Insurance Co. Ltd. -currently “A+”/Stable – “are unchanged following dividend payments totaling about €300 million [$393.8 million] to its parent company, Finland-based OKO Bank PLC (AA-/Stable/A-1+).”

S&P noted that the “quantum of the special dividend indicates that Pohjola’s capitalization will be managed more aggressively than expected going forward, reflecting OKO Bank’s tighter-than-expected centralized capital management approach.”

However, the rating agency indicated that the dividend payment “removes a historical strength from Pohjola’s rating profile, and thereby affects the entity’s stand-alone credit characteristics.”

The ratings are nonetheless unchanged, which S&P said reflects its opinion that “Pohjola remains strategically important to OKO Bank, and that financial support will continue to be available if needed. Pohjola is expected to manage its capital around a 70 percent solvency ratio, a level Standard & Poor’s views as good based on the entity’s current risk profile.”

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