By Alistair Barr
Aflac Inc. and Genworth Financial are among life insurers with
exposure to troubled lender CIT Group Inc. (CIT), analysts at
Credit Suisse said Thursday.
Late Wednesday, CIT said that it probably won't get a government
bailout anytime soon, increasing the likelihood that the lender may
collapse in what could be the fourth-largest bankruptcy in U.S.
history.
"We are highlighting life insurance exposures to CIT pending a
likely debt restructuring or other action that could trigger
impairments for life insurance companies," Thomas Gallagher and his
analyst colleagues at Credit Suisse wrote in a note to investors.
"There are expectations of about a 50- or 60-cent recovery rate on
the securities."
Aflac (AFL) has CIT securities with a conditional fair value of
more than $218 million, according to the Credit Suisse analysts.
That's 3.3% of the insurer's equity, excluding accumulated other
comprehensive income, or AOCI, they noted.
Genworth (GNW) has CIT securities with a conditional fair value
of nearly $140 million, according to the analysts. That's 1.5% of
the insurer's equity, excluding AOCI.
In addition, Lincoln Financial Corp. (LNC) has CIT securities
with a conditional fair value of $76 million, according to Credit
Suisse. That's 1% of the insurer's equity, excluding AOCI, the
analysts said.
Protective Life Corp. (PL) has CIT securities with a conditional
fair value of $32 million, according to the Credit Suisse analysts.
That's 1.7% of the insurer's equity, excluding AOCI, they
noted.
Conseco Inc. (CNO) has CIT securities with a conditional fair
value of more than $20 million, which is 0.9% of the insurer's
equity, excluding AOCI, the analysts said.
-Alistair Barr; 415-439-6400; AskNewswires@dowjones.com