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Fitch publishes Grupo ASSA ratings, affirms El Salvador unit

Fitch Ratings on April 3 published Grupo ASSA SA's long-term issuer default rating of BBB-, with a stable outlook.

Fitch also assigned the insurance group an F3 short-term issuer default rating and a "bbb-" viability rating.

The group's issuer default ratings mainly reflect the credit profile of its main subsidiary, ASSA Compania Tenedora SA, which is the largest contributor to its net income and largest source of its cash dividends. The subsidiary is the largest insurance company in Panama and has a strong franchise in Central America. It also has a good level of profitability, adequate capitalization and liquidity, as well as extensive reinsurance capacity, Fitch said.

Meanwhile, Grupo ASSA's viability rating is highly influenced by the operating environment of its subsidiaries. Although operations in Central America expose the entity to low credit-rated countries with different regulatory environments and uneven financial market development, the diversification provides the group with a high capacity to grow, generate revenues and strengthen its franchise, Fitch said.

The group's capital position is one of its strengths, reflecting the adequate capitalization of its insurance subsidiaries and its nature as a holding company that does not have individual debt. The insurer is also characterized by a moderate risk appettite, funding and liquidity that are managed at a subsidiary level, a strong and continuously growing franchise in Central America as well as high and consistent profitability, the rating agency noted.

The ratings incorporate the view that the company's expected dividend flow structure should continue to be driven by its core investments in Empresa General de Inversiones SA and Grupo Financiero BG SA.

In conjunction, Fitch affirmed the AA(slv) long-term national insurance financial strength rating of the group's subsidiary, ASSA Compañía de Seguros. The outlook is stable. The rating considers the capacity and willingness of ASSA Tenedora to provide support to the unit's operation, as shown in its technical, commercial and reinsurance protection support, Fitch said.