Weekly briefs

Norwich's S&P rating cut, Sovereign is one player tipped to want Norwich and AMP Office Trust interest.

Monday, December 15th 1997, 12:00AM

Norwich Union Life Insurance (NZ) Ltd had its counterparty credit rating and claims-paying ability rating cut from AA-minus to A-minus by Standards and Poors last week.
The rating agency has also placed Norwich on credit watch following the announcement a strategic review was going on within the organisation, which may result in parts of the business being sold.
S&P says potential change resulted in uncertainty and Norwich would stay on credit watch until the situation was resolved.

S&P says the earlier, higher, rating reflected implicit support available to Norwich in New Zealand from its United Kingdom-based parent Norwich Union.
"The stand-alone rating is based on the company's strong balance-sheet structure, conservative risk profile and satisfactory business franchise, tempered by (its) smaller size in the highly-competitive life insurance market in New Zealand."

Who's queuing up for Norwich?
Sovereign has been tipped as a possible buyer of Norwich if a sale does actually eventuate. Sovereign axed a $50 million institutional equity raising, last week, so it could assess a major acquisition.
A number of sources have also confirmed many potential investors were not supportive of the equity-raising offer as it was structured.
While Sovereign has been tipped as a potential buyer of Norwich many other fund management and life insurance businesses in New Zealand are reported to be interested in growth by acquisition. Previously firms such as Royal SunAlliance and Guardian Assurance have been tagged as buyers, yet other firms are also understood to be willing to write the necessary cheques.
The question with Norwich, as with any other sale, is finding two businesses that are compatible and can deliver clear benefits as a merged entity.

All eyes on AMP Office Trust listing
Property investment interest this week will focus on the allotment of shares in the AMP Office Trust, which closed to retail investors on Friday.
While retail interest has been reported to be "pleasing", AMP has lowered its expectations because of recent sharemarket volatility.
The Kiwi Development Trust (KDT) listed last week and its shares fell. While the offer was well supported by institutions, retail investors shied away from the issue. This has been put down to the development risk attached with the project and competition from other straight property floats such as AMP Office Trust.
KDT underwriters, Merrill Lynch, and a number of sub-underwriters, were forced to take up the 23.8 per cent shortfall in the $144 million issue.
When completed the Royal SunAlliance building will be the tallest office building in New Zealand.

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