Moody's may upgrade Cathay Financial

Moody's Investors Service said it placed on review for possible upgrade Taiwan-based Cathay Financial Holding Co.'s Baa1 long-term issuer rating.

The agency said its review was prompted by the reviews for possible upgrade of the insurance financial strength ratings of Cathay's key operating subsidiaries - Cathay Life Insurance and Cathay Century Insurance - because Cathay Financial has a strong dependence on its subsidiaries for future cash flows due to its financial-holding function.

The review will focus on Cathay Financial's strategic direction for the Cathay Group, its ability to maintain its sound financial leverage and its overall capital management strategy for the group's financial health, Moody's said. The review will also factor in the structural subordination of Cathay Financial's creditors relative to the creditors of its operating subsidiaries in terms of rights and claims.

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