SYDNEY (Reuters) - Ratings agency S&P Global downgraded the credit worthiness of troubled Australian wealth manager AMP Ltd <AMP.AX> and its subsidiaries by one notch on Tuesday, after it agreed to sell its life insurance unit to Britain's Resolution Life.
AMP unveiled renewed plans to sell the unit earlier this month and raised A$650 million ($439 million) to fund the restructuring of its flagship wealth-management business, as it posted its biggest half-year loss as a listed company.
S&P said it had lowered AMP's group rating by one notch to BBB+, because without the insurance unit AMP's earnings would rely on its troubled wealth and investment management operations, as well as its small domestic banking unit.
The agency also lowered the ratings on each of its subsidiaries by one notch.
"The downgrade of AMP Ltd reflects our view of its weakened group credit profile, with lower expected diversification with the pending divestment of AMP Life Ltd and the reliance on lower-rated operating subsidiaries," the agency said in a statement.
The agency said AMP's credit outlook was negative and warned that its rating could be lowered by up to two more notches after the life insurance divestment completes.
"The negative outlook ... also reflects the potential for further pressures related to the AMP group's capitalisation from possible further remediation action, legal action, and risk associated with implementing new strategy."
AMP is fighting to steady itself a year after a public inquiry into Australia's finance sector accused it of improperly charging fees and attempting to deceive regulators.
($1 = 1.4806 Australian dollars)
(Reporting by Paulina Duran; Editing by Stephen Coates)
