A.M. Best Comments on Credit Ratings of AmTrust Financial Services Following Announcement of Offer for Certain Public Shares

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FOR IMMEDIATE RELEASE

OLDWICK - JANUARY 09, 2018 04:35 PM (EST)
A.M. Best has commented that the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” of AmTrust Financial Services, Inc. (AFSI) [NASDAQ:AFSI] (headquartered in New York, NY) and all associated Long-Term Issue Credit Ratings and indicative Long-Term Issue Credit Ratings, as well as the Long-Term ICRs and Financial Strength Ratings of its operating subsidiaries are unchanged by the announcement today that private equity funds managed by Stone Point Capital LLC and members of the Karfunkel and Zyskind families (collectively, “the family”), who currently own or control approximately 43% of AFSI’s common shares, have made a proposal to the AFSI Board of Directors to acquire the outstanding public shares of AFSI that are not controlled by the family. The Credit Ratings (ratings) remain under review with negative implications.

It is expected that a special committee of the independent members of the AFSI board will assess the offer and make a recommendation to the Board of Directors regarding the proposed transaction. The proposed transaction is subject to a requirement that it be approved by a majority of the current shareholders, excluding the family, senior management or their affiliates.

The ratings of AFSI and its operating insurance companies were placed under review with negative implications on Nov. 6, 2017. At the time, A.M. Best indicated that the ratings would remain under review until:

• the close of a transaction with Madison Dearborn Partners (MDP), under which AFSI will sell MDP certain U.S.-based managing general agencies and warranty third-party administrators, and A.M. Best has assessed the impact of the actual closing terms on risk-adjusted capital; and


• AFSI’s year-end 2017 financials have been filed, and A.M. Best has assessed the full-year reserve information to determine appropriate capital charges associated with enterprise reserves.

As these steps have not been concluded, and as there is no definitive agreement related to the acquisition of AFSI’s outstanding public shares at this time, the ratings remain under review. A.M. Best will continue to monitor developments and take rating action as conditions warrant.

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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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