The placement of the rating on the Credit Watch list reflects the fact that after the merger, the size of the company's consolidated capital may increase, and its competitive position may strengthen.
S&P Global Ratings:
"We may upgrade Freedom Insurance by one notch to de-list once the merger is completed and there is sustained progress towards integration goals, as well as improved capitalization and profitability, improved market position, and maintained asset quality on a consolidated basis."
At the same time, Freedom Insurance's (FFI) rating is two notches higher than the FRHC's ('B-') loan portfolio, as the insurance company's credit quality will remain robust even as the group's creditworthiness deteriorates. This is due to FFI's operational independence and limited overlap between the company's customer base and market niche with other group companies.
The agency also downgraded the long-term credit rating and financial strength rating of IC London-Almaty from "BB-" to "B +", on the national scale from ""kzA-"" ""kzBBB +"", the forecast is "" positive"". At the same time, S&P Global Ratings notes that it still rates the company's own credit profile at 'BB-'.
In addition, the agency highlights the competitive positions of IC London-Almaty in the Kazakhstani market, in particular in the corporate insurance segment, which are supported by high capital adequacy ratios and the availability of the necessary reinsurance protection.
IC London-Almaty's ratings are higher than the parent structure's, as the regulatory regime in Kazakhstan excludes the outflow of funds from insurance companies to support the group, thus the company is separate from Freedom Holding Corp. At the same time, the insurance company will play an important role in the implementation of the group's long-term business development strategy.
As a reminder, on August 27, Freedom Finance JSC and Dostyk Leasing LLP concluded a transaction for the purchase and sale of IC London-Almaty. After the parties fulfill the conditions, IC London-Almaty will become part of Freedom Holding Corp., and IC Freedom Insurance will assume all rights and obligations under existing contracts and other obligations of the affiliated company. The merger process is scheduled to be completed by the end of 2022.
S&P Global Ratings:
"We may upgrade Freedom Insurance by one notch to de-list once the merger is completed and there is sustained progress towards integration goals, as well as improved capitalization and profitability, improved market position, and maintained asset quality on a consolidated basis."
At the same time, Freedom Insurance's (FFI) rating is two notches higher than the FRHC's ('B-') loan portfolio, as the insurance company's credit quality will remain robust even as the group's creditworthiness deteriorates. This is due to FFI's operational independence and limited overlap between the company's customer base and market niche with other group companies.
The agency also downgraded the long-term credit rating and financial strength rating of IC London-Almaty from "BB-" to "B +", on the national scale from ""kzA-"" ""kzBBB +"", the forecast is "" positive"". At the same time, S&P Global Ratings notes that it still rates the company's own credit profile at 'BB-'.
In addition, the agency highlights the competitive positions of IC London-Almaty in the Kazakhstani market, in particular in the corporate insurance segment, which are supported by high capital adequacy ratios and the availability of the necessary reinsurance protection.
IC London-Almaty's ratings are higher than the parent structure's, as the regulatory regime in Kazakhstan excludes the outflow of funds from insurance companies to support the group, thus the company is separate from Freedom Holding Corp. At the same time, the insurance company will play an important role in the implementation of the group's long-term business development strategy.
As a reminder, on August 27, Freedom Finance JSC and Dostyk Leasing LLP concluded a transaction for the purchase and sale of IC London-Almaty. After the parties fulfill the conditions, IC London-Almaty will become part of Freedom Holding Corp., and IC Freedom Insurance will assume all rights and obligations under existing contracts and other obligations of the affiliated company. The merger process is scheduled to be completed by the end of 2022.
