Standard & Poor's has announced that it will be keeping Swiss Re on credit watch with negative implications.
Swiss Re was placed on credit watch on 18 November 2005, following its announcement that it had reached an agreement with General Electric to acquire the latter's reinsurance operations, GE Insurance Solutions
Credit analyst Simon Marshall, said: "The CreditWatch placement will be resolved when the transaction to acquire GEIS completes, which is expected to be mid-2006."
The ratings agency said the credit watch status reflects the execution risk associated with integrating a group of the size and complexity of GEIS, which is rated lower than Swiss Re.
It added that these risks are partly offset by Swiss Re's track record of successful transatlantic acquisitions and the advanced integration planning already in place.
S&P's said if the transaction is completed as currently constituted, it expects that the ratings on Swiss Re and its core operating companies would be lowered to 'AA-' with a stable outlook.
If the transaction does not proceed, the ratings on Swiss Re would be affirmed at their current level.
