Standard & Poor’s has announced:
- •We have revised our view of IGM’s importance to its ultimate parent, Power Corp. of Canada, to moderately strategic from nonstrategic.
- •We are upgrading IGM to ‘A+/A-1+’ from ‘A/A-1’ and raising all of our
issue-level ratings by one notch.- •The stable outlook reflects our expectation that IGM will maintain a strong market position in Canada while keeping stable-to-improving profitability and coverage ratios.
…
“The upgrade follows our reassessment of IGM as a moderately strategic subsidiary of Power Corp. of Canada compared with our previous assessment of nonstrategic under our group rating methodology,” said S&P Global Ratings credit analyst Brian Estiz. “We base our reassessment of the group credit profile on our belief that IGM is an important part of Power’s long-term strategy and is unlikely to be sold in the near term. We believe that Power would support the company to a limited extent if there was need. IGM represents about 20% of Power Financial Corp.’s earnings, which in turn represents about 85% of Power’s net earnings. We consider Power’s business risk profile excellent, largely because of the leading market positions of IGM and Great-West Life, which both have the No. 1 market position in Canada in their respective businesses and have reported stable earnings over the past few years.”
This follows the downgrade of December, 2014.