10 Insurers See Ratings Updates
Insurance Networking Ratings Corner, January 8, 2013
S&P said the rating is based on the lowest of the following: the rating on the catastrophe risk ('B+'); the rating on the assets in the collateral account ('AAAm'); and the rating on the ceding insurer ('AA-').-
Fitch has affirmed the ratings of RenaissanceRe Holdings Ltd. and its subsidiaries, including the Issuer Default Rating (IDR) for RNR at 'A', and the Insurer Financial Strength (IFS) rating of Renaissance Reinsurance Ltd. at 'A+'. The Rating Outlook is Stable.
Fitch's rationale for the affirmation of RNR's ratings reflects the company's continued strong leadership position in the property catastrophe reinsurance market, RNR's reasonable operating and financial leverage, and overall high-quality and liquid portfolio of fixed-income and short-term investments. The ratings also reflect the competitive, but improved, property catastrophe market rate environment, volatile underwriting results, and potential volatility from the company's alternative investments.
RNR announced an initial estimated net negative impact from Hurricane Sandy of $130 million on Q4 2012 results of operations. Fitch considers this level to be manageable, given the company's solid capitalization (representing about 3 percent of shareholders' equity at Sept. 30, 2012), although the loss estimate is still subject to significant uncertainty.
S&P assigned its 'B-' debt and '3' recovery ratings (indicating the expectation for meaningful [50 percent to 70 percent] recovery of principal in the event of a default) to USI Inc.'s (B-/Stable/--) senior-secured facilities consisting of a $1.025 billion term loan, due 2019, and $150 million revolving credit facility (undrawn at closing), due 2017. S&P also assigned its 'CCC' debt and '6' recovery ratings (indicating the expectation for negligible [0 percent to 10 percent] recovery of principal in the event of a default) to the company's $630 million, senior unsecured notes, due 2021.
S&P said it assigned these final ratings following USI Inc.'s announcement that it has closed and funded the transaction for its senior-secured credit facilities and senior notes issuance, and the agency received final documentation. USI Inc. issued this debt in conjunction with its $2.3 billion leveraged buyout by Onex Corp. Prior to this, the ratings on these facilities were preliminary.
At the same time, S&P is withdrawing the counterparty credit rating on USI Holdings Corp., the issuer of debt before the refinancing, as this debt has been repaid.
For more information on related topics, visit the following channels: