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FOR IMMEDIATE RELEASE
LONDON - FEBRUARY 06, 2017 10:55 AM (EST)
A.M. Best has assigned a Long-Term Issue Credit Rating of “a-” to the forthcoming GBP 300 million subordinated notes, under the published terms, to be issued on 7 February 2017 by the Society of Lloyd’s (The Society) (United Kingdom). The outlook assigned to the Credit Rating (rating) is stable, which is in line with the outlook of the Society of Lloyd’s Long-Term Issuer Credit Rating (Long-Term ICR).
Under the published terms, the callable subordinated notes will pay a fixed coupon of 4.875% annually in arrears through to their first call date in 2027, and thereafter of three months Libor plus 4.479% payable quarterly in arrears. The notes will mature in 2047.
The net proceeds of the issue of the notes will be used to provide the issuer with additional solvency capital to meet regulatory capital requirements and for general corporate purposes.
The Society’s debt leverage ratios remain within A.M. Best’s tolerances.
The rating of the subordinated notes is one notch below the Society’s Long-Term ICR, reflecting the fact that they are subordinated to senior creditors, but senior to junior subordinated obligations.
A.M. Best deviates from its Insurance Holding Company and Debt Ratings methodology in its analysis of the Society. The rating of the Society is notched from the rating of the Lloyd’s market. However, the Society is not the holding company of Lloyd’s which, as a market, does not have a holding company. Mitigating the deviation is the unique relationship between the Society and the Lloyd’s market, which means that the ability of the Society to meet its obligations is inextricably linked to the ability of Lloyd’s to meet its obligations.
This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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