OREANDA-NEWS. S&P Global Ratings today said it has placed its 'A-' financial strength and long-term counterparty credit ratings on Japan-based Mitsui Life Insurance Co. Ltd. on CreditWatch with positive implications. The CreditWatch placement follows Mitsui Life's issuance of subordinated bonds totaling ?80.0 billion in July 2016 and its borrowing of subordinated loans totaling ?100.0 billion in August, mainly to refinance its existing subordinated loans.

We believe the restructuring of Mitsui Life's debt profile could lead us to revise upward our assessment of its financial risk profile and the stand-alone credit profile (SACP; our assessment of the company's creditworthiness excluding the possibility of extraordinary support from the parent group) because we regard a portion of the subordinated bonds as having intermediate equity content. Also, the refinancing is likely to substantially ease Mitsui Life's interest burden, which might boost our assessment of its prospective capital and earnings. Our 'A-' ratings on Mitsui Life incorporate three notches of uplift from the 'bbb-' SACP, based on our assessment that Mitsui Life holds a strategically important position within the Nippon Life group.

We expect to resolve the CreditWatch placement within three months once we have reviewed Mitsui Life's business and financial strategies and assessed the impact that the strategies and the debt financing have on the company's credit quality. If we determine that Mitsui Life's capital adequacy will improve materially, we might revise the SACP upward, which would lead to an upgrade. Conversely, if we determine the capital adequacy will improve by a limited degree, we will affirm our ratings.