...High Holding Company Leverage: KD Group, financna druzba, d.d.'s (KD Group) high financial leverage ratio (FLR) of 43% at end-2016 (end-2015: 40%) is a key negative rating driver. FLR increased in 2016 following the issuance of EUR50 million of subordinated notes in May 2016 by Adriatic Slovenica d.d., the group's main operating entity. However, the group plans to reduce its leverage in the medium term. Moderate Business Profile: Fitch considers KD Group to have "Small Size/Scale", according to its global benchmarks, with total assets (excluding reinsurance assets) of EUR788 million and total equity of EUR122 million at end-2016. However, the group has a strong position in its main market, Slovenia. Adriatic Slovenica is the third-largest insurer in the country, and KD Funds, the group's asset manager, is second, with a market share of 23% in the Slovenian mutual fund market. Improved Capitalisation: Fitch views KD Group's consolidated capitalisation as "Very Strong" at end-2016 (end-2015:...
