Pacific Life Rating Cut by Fitch Over CRE

Fitch Ratings, New York, has also downgraded ratings of Pacific LifeCorp, Newport Beach, Calif., and its subsidiaries, in large part because of fears of continued deterioration of the commercial real estate market could result in higher-than-expected losses for the parent company. PLC has an above-average investment exposure to commercial real estate related assets, including commercial mortgage-backed securities, direct loans and real estate. At the end of the third quarter 2009, these assets represented over 16% of PLC's total invested assets. Fitch is also worried about PLC's exposure to prime and alt-A residential MBS. The rating agency said PLC's gross unrealized loss position relating to these asset classes was $1.2 billion as of Sept. 30, 2009. However, Fitch said it believes PLC's exposure to future investment losses is manageable in the context of its statutory capital and projected operating earnings. PLC's long-term issuer default rating was dropped from "A" to "A-", while Pacific Life Insurance Co., had its insurer financial strength rating cut from "AA-" to "A+".