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Bulletin: AMP Capital's Potential JV Could Weigh On Group Creditworthiness

SYDNEY (S&P Global Ratings) Feb. 26, 2021--AMP Capital's potential joint venture (JV) with ARES Management Corp. (ARES) could weigh on the ratings on AMP group entities, S&P Global Ratings said today. This follows AMP's announcement today that it has entered into a nonbinding heads of agreement with ARES to pursue the formation of a JV. The Australia-based AMP group includes AMP Ltd. (BBB-/Stable/--), AMP Group Holdings Ltd. (BBB-/Stable/A-3), and AMP Bank Ltd. (BBB/Stable/A-2).

AMP Capital houses the group's investment business. Under the group's current operating structure, AMP Capital contributes positively to the group's overall credit strength, and forms the bulk of group earnings. In our view, a weakening of AMP Capital's credit profile could therefore weigh on the overall group ratings. Factors that could contribute to a weaker group credit profile include lower overall earnings contribution, and a weaker overall business and financial risk profile from AMP Capital. The application of the proceeds from the proposed JV, under which ARES would have majority ownership and management control, is currently unknown.

We will continue to monitor the developments around this potential transaction noting that at this stage there is no certainty over whether it will proceed, or the terms on which it would proceed.

This report does not constitute a rating action.


S&P Global Ratings Australia Pty Ltd holds Australian financial services license number 337565 under the Corporations Act 2001. S&P Global Ratings' credit ratings and related research are not intended for and must not be distributed to any person in Australia other than a wholesale client (as defined in Chapter 7 of the Corporations Act).

Primary Credit Analyst:Nico N DeLange, Sydney + 61 2 9255 9887;
Secondary Contacts:Mark P Symes, Melbourne (61) 3-9631-2051;
Sharad Jain, Melbourne + 61 3 9631 2077;

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