A.M. Best Comments on Credit Ratings of Massachusetts Mutual Life Insurance Company Following Sale of OppenheimerFunds to Invesco

OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best has commented that the Credit Ratings (ratings) of
Massachusetts Mutual Life Insurance Company (MassMutual) (Springfield,
MA) remain unchanged following the Oct. 18, 2018, announcement that it
has entered into an agreement to sell Oppenheimer Funds, Inc.
(OppenheimerFunds) to Invesco. The Financial Strength Rating of A++
(Superior) and the Long-Term ICRs of “aa+” for MassMutual and its
operating insurance subsidiaries also are unchanged following the
announcement. Additionally, the Long-Term Issue Credit Ratings on
MassMutual’s surplus notes of “aa-” and its notes issued under funding
agreement-backed securities in MassMutual Global Funding, LLC and
MassMutual Global Funding II of “aa+” remain unchanged. The outlooks of
these ratings are stable.

Invesco has agreed to purchase OppenheimerFunds from MassMutual for $5.7
billion in exchange for the issuance of $4 billion in preferred stock to
MassMutual with a coupon of 5.9% and a 21-year non-call provision and
approximately $1.7 billion in common stock. Prospectively, MassMutual
will have a 15.5% ownership stake, a seat on Invesco’s board and will
become Invesco’s single largest institutional shareholder. The
transaction is tax-deferred and it is anticipated that it will be
granted equity accounting treatment and will be accretive to
risk-adjusted capitalization with an increase in total statutory
adjusted capital of approximately $4.0 billion, which A.M. Best views
favorably. This transaction is expected to close in the second quarter
of 2019.

The transaction is moderately negative from a near-term earnings
perspective (incorporating transaction costs), but A.M. Best expects it
to be accretive in the longer term. OppenheimerFunds’ operating income
has been positive over the past several years, although results have
faced some pressure from the secular trends occurring within the highly
competitive global asset management marketplace. These trends include
the shift from active to passive management, the need for technological
investment in digitalization and improvement in the customer experience.
The transaction effectively swaps operational control of
OppenheimerFunds for a steady stream of dividend income, reduces the
impact of equity market volatility on economic capital and eliminates
MassMutual’s need for additional capital investment in OppenheimerFunds.
The transaction improves Invesco’s scale and market rankings in global
asset management and is complementary from a fund line-up perspective.

A.M. Best views the sale as having a neutral impact on MassMutual’s
favorable business profile assessment. While the company will be less
diversified in its asset management segment, the OppenheimerFunds sale
will allow MassMutual to focus on core life insurance offerings, in
which MassMutual maintains leading market positions in whole life,
disability income and strong institutional capabilities within pension
risk transfer, bank-owned life insurance and funding agreements. A.M.
Best notes that MassMutual will continue to retain its Barings asset
management subsidiary, which is focused on institutional asset

This press release relates to Credit Ratings that have been published
on A.M. Best’s website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best’s
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best’s Credit Ratings
. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view
for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating
Action Press Releases

A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
for more information

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its


A.M. Best
Frank Walko
Financial Analyst
908 439 2200, ext. 5072


Manager, Public Relations
+1 908 439
2200, ext. 5159


+1 908 439 2200, ext. 5892

Director, Public Relations
+1 908 439
2200, ext. 5644



I have been involved with publishing and marketing for the past 32 years. My passion is helping people share their voice. I am able to do this through two important venues: One, with Area-Info.net where people can share everything from opinions to events to news. It is your choice! What do you want to share? Two, through a new program called America's Real Deal I am involved with to help business owners get their voice heard.I schedule speaking engagements with community groups and business groups to share my passion about the importance of "sharing your voice".Contact me directly at lee@leeeverton.com for scheduling information.