OREANDA-NEWS. S&P Global Ratings today assigned its 'zaAA+' South Africa national scale issue ratings to South Africa-based Sanlam Life Insurance Ltd.'s (Sanlam's) unsecured subordinated callable note. The company will use the proceeds for general corporate purposes.

Under our methodology for rating such issues, we apply a one-notch downward adjustment on the global scale for deferability and another one on the national scale for subordination. As a result, we rate the proposed note one notch below our 'zaAAA' South Africa national scale rating on the issuer, Sanlam.

Sanlam can call the note on the specified maturity date and also has the right to redeem the note on a tax or regulatory event. For redemptions prior to the maturity date, Sanlam requires the prior consent of the registrar.

We expect to classify the note as having minimal equity content under our hybrid criteria as the maturity is less than 20 years. Including this debt issuance, we estimate Sanlam's financial leverage (debt plus hybrid, divided by the sum of economic capital available, debt, and hybrid) and fixed-charge coverage (EBITDA divided by interest on senior and subordinated debt) will remain neutral rating factors.

The 'zaAAA' South Africa national scale issuer rating on Sanlam remains unchanged. This reflects our view of the company's satisfactory business risk profile, which reflects its strong competitive position. Sanlam has an upper adequate financial risk profile, which combines moderately strong capital and earnings, a moderate risk position, and adequate financial flexibility. Our assessment of enterprise risk management, management and governance, and liquidity are neutral to the rating. Sanlam passes our hypothetical foreign currency sovereign default stress scenario as we believe it will maintain positive regulatory capital and a stressed liquidity ratio greater than 100%.