Fitch Places RGA, Inc. on Rating Watch Negative Following Announcement of MetLife Split-off

CHICAGO--(BUSINESS WIRE)--June 2, 2008--Fitch Ratings has placed Reinsurance Group of America, Inc. ([RGA, Inc.] IDR rated 'A+') and RGA Reinsurance Company ([RGA US] IFS rated 'AA-') on Rating Watch Negative. See all ratings listed below. 
 
The ratings action follows MetLife, Inc.'s (NYSE:MET) announcement that it plans to split-off its 52% stake in RGA, Inc. in a transaction that is expected to close in September 2008. While RGA, Inc. has always been viewed as a non-core operating affiliate of MET, RGA, Inc.'s ratings have benefited from explicit and implicit financial support from MET that will no longer be available. At close, Fitch expects to downgrade all ratings by no more than two notches. 
 
Fitch notes an ongoing rating concern for RGA, Inc.'s continues to be the potential volatility in quarterly results due to mortality experience and the company's reliance on the continuing availability of affordable retrocession. At $8 million for a single life, the company's maximum retention in North America is higher than most of its peers. 
 
RGA Inc.'s ratings strengths continue to include its well-established and successful North American traditional life reinsurance operations, underwriting expertise and facultative focus, sound risk-based capitalization, good investment performance, liquid investment portfolio and expanding geographic diversification beyond well-established North American operations. Performance from continuing operations continues to demonstrate pricing discipline, as well as the company's strong facultative focus where pricing is less competitive. 
 
Fitch believes that the capitalization of the standalone company will be consistent with Dec. 31, 2007 levels: RGA US risk-based capital ratio of 321% and RGA, Inc.'s equity-credit-adjusted leverage of 16.8%. If the company expects to operate at capitalization levels that deviate materially from these levels after the split-out, the ratings could be adjusted further. 
 
The following ratings have been placed on Rating Watch Negative: 
 
Reinsurance Group of America, Inc. 
 
--Issuer Default Rating (IDR) 'A+'; 
 
--6.75% senior notes due Dec. 15, 2011 'A'; 
 
--5.625% senior notes due March 15, 2017 'A'; 
 
--6.75% million junior unsubordinated debentures due Dec. 15, 2065 'A-'. 
 
RGA Capital Trust I 
 
--Convertible trust preferred securities (PIERS) 'A-'. 
 
RGA Reinsurance Company (The) 
 
--Insurer financial strength (IFS) 'AA-'. 
 
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site. The issuer did not participate in the rating process other than through the medium of its public disclosure.