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Moody's: Chilean annuity ops sale a credit positive for SURA Asset Management

SURA Asset Management's recent deal to sell its annuities business in Chile is credit positive for the Grupo de Inversiones Suramericana SA unit, as the sale will allow the company to place a greater focus on its core wealth management business, Moody's said in a report.

The deal, which follows the 2017 sale of SURA Asset Management's Peruvian life insurance and mortgage operations for US$276 million, will see BICECORP SA and Inversiones BICE Chileconsult SA acquire the Chilean annuities business for about US$232 million.

The transaction is expected to close before the end of 2018, subject to regulatory approval.

The rating agency expects SURA to use part of the sale proceeds to reduce debt, which would bolster the company's financial position. The proceeds also will give the firm "additional financial flexibility to defend its leading market share position and take advantage of improving growth conditions in the region," Moody's noted.

Based on local accounting standards, the deal value represents a price-to-book ratio of 1.36, Grupo Sura said when it announced the sale earlier in March.