OREANDA-NEWS. Fitch Ratings has assigned a 'BBB' rating to Intact Financial Corporation's (Toronto: IFC) (Intact) Series 4 non-cumulative preferred shares.

Fitch took no rating action on Intact's other ratings. A full list of ratings follows at the end of this release.

KEY RATING DRIVERS

Intact's recently announced that 1.6 million of it 10 million non-cumulative Rate Reset Class A Share Series 3 (Series 3 Preferred Shares) were tendered for conversion on Sept. 30, 2016. At that time, each share will be converted on a one-for-one basis into non-cumulative floating rate Class A Shares Series 4 (Series 4 Preferred Shares) of IFC.

Subject to certain conditions described in IFC's prospectus supplement dated Aug. 11, 2011, IFC may redeem the Series 3 Preferred Shares, in whole or in part, on Sept. 30, 2021 and on Sept. 30 every five years thereafter and may redeem the Series 4 Preferred Shares, in whole or in part, after Sept. 30, 2016.

This transaction will not have any impact on financial leverage and a minimal impact on fixed charge coverage given the lower rate of the Series 3 Preferred Shares.

For further rationale on Intact's ratings see press release dated Aug. 31, 2016.

RATING SENSITIVITIES

Key rating triggers that could lead to a downgrade include:

--A MCT below 170%;

--Sustained adverse reserve development of more than 3% of prior year shareholder's equity;

--A material acquisition outside of the Canadian insurance market;

--Sustained GAAP fixed charge coverage ratio below 7.0x or financial leverage above 25%.

Key rating triggers that could lead to an upgrade include:

--Improvement in capital adequacy and leverage measures consistent with 'AA' sector credit factors;

--Consistent and sustained financial performance with return on equity in the low to mid-teens;

--Sustained favorable reserve trends;

--Sustained financial leverage below 20%.

FULL LIST OF RATING ACTIONS

Fitch has assigned the following rating:

Intact Financial Corporation

--CAD 40 million 3.172% non-cumulative class A series 4 preferred stock 'BBB'.

Fitch currently rates Intact and its insurance subsidiaries as follows:

Intact Financial Corporation

--IDR 'A';

--CAD 250 million unsecured senior debt 5.41% due Sept. 3, 2019 'A-';

--CAD 300 million unsecured senior debt 4.70% due Aug. 18, 2021 'A-';

--CAD250 million unsecured senior debt 3.77% due March 2, 2026 'A-';

--CAD 250 million unsecured senior debt 6.40% due Nov. 23, 2039 'A-';

--CAD 250 million unsecured senior debt 5.16% due June 16, 2042 'A-';

--CAD 100 million unsecured senior debt 6.20% due July 8, 2061 'A-';

--CAD 250 million 4.2% non-cumulative class A series 1 preferred stock 'BBB;'

--CAD 210 million 4.2% non-cumulative class A series 3 preferred stock 'BBB'.

The Rating Outlook is Stable.

Intact Assurances Agricoles Inc.

Intact Insurance Company

Jevco Insurance Company

La Compagnie d'Assurances Belair Inc.

Nordic Insurance Company of Canada

Novex Insurance Company

Trafalgar Insurance Company of Canada

--Insurer Financial Strength 'AA-', Outlook Stable.