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FOR IMMEDIATE RELEASE
LONDON - JANUARY 09, 2015 12:32 PM (EST)
A.M. Best has placed the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of "a" of the insurance subsidiaries of Catlin Group Limited (Catlin) (Bermuda) under review with positive implications based on the recent announcement that it has entered into an agreement to be acquired by XL Group plc. Additionally, A.M. Best has placed the ICRs of "bbb" of Catlin Underwriting (CU) (United Kingdom), a non-operating holding company, and Catlin, the ultimate parent company of the Catlin group, under review with positive implications.
Concurrently, A.M. Best has placed the debt ratings of "bbb" on USD 600 million 7.249% preferred stock issued by Catlin Insurance Company Limited, and "bbb-" on USD 27 million subordinated floating rate notes due 2036 and EUR 7 million subordinated floating rate notes due 2035 issued by CU, under review with positive implications.
The FSR of A (Excellent) and ICR of "a+" of Lloyd's Syndicate 2003 (United Kingdom), which is managed by Catlin Underwriting Agencies Limited, are unchanged. The outlook for both ratings is positive. The syndicate's ratings reflect the financial strength of Lloyd's, which underpins the security of all Lloyd's syndicates.
The rating actions follow Catlin's announcement on Jan. 9, 2015 that its management has reached agreement with XL Group plc's management (XL) on key financial terms regarding an offer by XL to acquire Catlin. Under the terms of the offer, each Catlin ordinary share would be exchanged for 410 pence (GBp), including a GBp 22 final dividend, and 0.13 XL ordinary shares. The ratings have been placed under review because A.M. Best needs to evaluate XL's plans for Catlin and its subsidiaries and the impact of the transaction on the risk-adjusted capitalisation of the Catlin entities.
A.M Best expects to resolve the under review status of the ratings upon completion of the transaction.
Should risk-adjusted capitalisation improve as a result of the transaction, there may be positive pressure on the ratings. Negative rating actions are unlikely in the near term.
The FSR of A (Excellent) and the ICRs of "a" have been placed under review with positive implications for the following subsidiaries of Catlin Group Limited:
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 utilised:
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
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.