CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - JANUARY 26, 2015 01:59 PM (EST)
A.M. Best has placed under review with negative implications the financial strength rating (FSR) of A+ and the issuer credit ratings of "aa-" of Partner Reinsurance Company Ltd. (PartnerRe) and its affiliates. A.M. Best also has placed under review with negative implications the ICR of "a-" and debt ratings of PartnerRe's parent, PartnerRe Ltd, following the announcement that PartnerRe Ltd and AXIS Capital Holdings Limited have signed a definitive merger agreement. All companies are domiciled in Hamilton, Bermuda. (See below for a detailed list of the companies and ratings.)
The under review status reflects A.M. Best's concerns regarding the complexity and scale of the merger. The new combined organization will face execution risk and challenges relating to the integration, retention of key management and the merging of infrastructure, as well as company cultures.
Despite the aforementioned challenges, A.M. Best acknowledges the potential upside of the combined organization, including its diversified product offering, increased scale and business profile.
The under review status will be removed once A.M. Best reviews the final integration plan and the transaction closes. Factors that could lead to a negative outlook or rating downgrade include A.M. Best's view that the transaction and integration plan represent a potentially material risk to the organization. Factors that could lead to a stabilization of the ratings include comprehensive and timely integration plan and retention of key personnel.
The FSR of A+ (Superior) and the ICRs of "aa-" have been placed under review with negative implications for Partner Reinsurance Company Ltd. and its following affiliates:
The following debt ratings have been placed under review with negative implications:
PartnerRe Ltd.—
— "bbb" on $230 million 6.5% preferred shares, Series D
— "bbb" on $325 million 7.25% preferred shares, Series E
— "bbb" on $250 million 5.875% preferred shares, Series F
PartnerRe Finance A LLC—
— "a-" on $250 million 6.875% senior unsecured notes, due 2018
PartnerRe Finance B LLC—
— "a-" on $500 million 5.5% senior unsecured notes, due 2020
PartnerRe Financial II, Inc.—
— "bbb" on $250 million 6.44% junior subordinated capital efficient notes, due 2066
The following indicative ratings under the shelf registration have been placed under review with negative implications:
PartnerRe Ltd.—
— "a-" on senior unsecured debt
— "bbb+" on subordinated debt
— "bbb" on preferred stock
PartnerRe Financial II, Inc. (guaranteed by PartnerRe Ltd.)—
— "a-" on senior unsecured debt
— "bbb+" on subordinated debt
— "bbb" on preferred stock
PartnerRe Capital Trust II and III (guaranteed by PartnerRe Ltd.)—
— "bbb+" on trust preferred securities
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best's Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.