Fitch Rates Jackson's New Short-Term Funding Program 'F1+'

Published: 2025-03-05 04:34:11 ET JXN

Fitch Ratings has assigned an 'F1+' rating to Jackson National Life Short Term Funding, LLC's (JNLSTF) commercial paper program.

Key Rating Drivers

The 'F1+' program rating is equivalent to Jackson National Life Insurance Company (JNLIC)'s 'F1+' Short-Term Insurer Financial Strength (ST-IFS). A ST-IFS rating provides an assessment of the near-term financial strength of an insurance organization and its capacity to meet senior obligations to policyholders and contract holders that would be expected to be due within one year. ST-IFS ratings are used primarily by U.S. life insurance companies that sell short-term funding agreements.

Per Fitch criteria, JNLIC's 'A' Long-Term Insurer Financial Strength (LT-IFS) rating can map to two possible ST-IFS ratings. JNLIC's ST-IFS maps to the higher 'F1+' based on 'aa' scores for both, Short-Term Debt Service and Financial Flexibility and Short-Term Asset/Liability and Liquidity Management. JNLIC exhibits solid financial flexibility, operating cash flows, liquidity management and short-term coverage.

JNLSTF is a bankruptcy-remote special purpose limited liability company formed under the laws of the State of Delaware. JNLSTF may from time to time offer up to $3 billion of its commercial paper notes pursuant to a commercial paper program. JNLSTF was established for the sole purpose of issuing commercial paper notes secured by a funding agreement issued by JNLIC, a Michigan-domiciled insurance company. JNLIC is a wholly owned subsidiary of Jackson Financial Inc.

The 'F1+' rating for the commercial paper program reflects that the obligations are secured by a funding agreement with a cash flow structure that enables the administrative agent to make payments on the commercial paper. Scheduled payments under the funding agreement have priority in liquidation equal to the policyholders of JNLIC. Thus, the notes depend on JNLIC's credit quality and are assigned ratings equal to the JNLIC's ST-IFS Rating.

On Sept. 24, 2024, Fitch affirmed Jackson National Life Insurance Company's Long-Term IFS at 'A'. The Rating Outlook is Stable.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

The ratings of any commercial paper notes issued by JNLSTF could be downgraded if JNLIC's ST-IFS rating was downgraded;

JNLIC's ST IFS rating could be downgraded if the Short-Term Debt Service and Financial Flexibility score or Short-Term Asset/Liability and Liquidity Management score decline below 'aa';

JNLIC's ST-IFS rating could be downgraded if its Long-Term IFS rating was downgraded.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

JNLIC's ST-IFS and JNLSTF's commercial paper program are currently assigned Fitch's highest short-term rating.

Date of Relevant Committee

25 February 2025

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.