Fitch Ratings has downgraded Resolution’s rating to negative following Standard Life’s withdrawal of its offer for the life company yesterday.
Fitch says that Pearl’s offer for the company is “potentially detrimental” to Resolution’s credit quality and it has decided to downgrade its rating as a result.
The ratings agency says Pearl’s current capital management strategy is more aggressive than Resolution’s and, if continued, would adversely affect Resolution’s capital strength.
The agency also believes that a transaction with Pearl could present significant integration risks relative to the limited synergies available from combining the closed funds of Pearl and Resolution.
Fitch expects to resolve Resolution’s ratings watches once a transaction is finalised or if Pearl’s offer is withdrawn.