AM Best


A.M. Best Comments on Credit Ratings of Sirius International Group, Ltd. and Its Main Subsidiaries


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FOR IMMEDIATE RELEASE

LONDON - SEPTEMBER 18, 2017 05:07 PM (EDT)
A.M. Best has commented that the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” of Sirius International Group, Ltd. (SIG) (Bermuda), and the Financial Strength Ratings of A (Excellent) and the Long-Term ICRs of “a” of Sirius Bermuda Insurance Company Ltd. (Bermuda), Sirius International Insurance Corporation (publ) (Sweden), and Sirius America Insurance Company (New York, NY) remain unchanged following the Sept. 14, 2017, announcement that its ultimate parent, Sirius International Insurance Group, Ltd. (SIIG) (Bermuda), has signed a definitive agreement with Delek Group Ltd. (Delek Group) (Israel) to purchase 4.9% of The Phoenix Holdings Ltd. (The Phoenix) (Israel). The outlook of these Credit Ratings (ratings) remains negative.

The transaction will provide SIIG with a minority shareholding of The Phoenix, a leading Israel insurance group writing life and non-life business, together with the option to purchase the balance of Delek Group’s holding (47.4%) in The Phoenix during a 60-day exclusivity period, during which SIIG will conduct its due diligence. SIIG has acquired the 4.9% share of The Phoenix for NIS 208 million (approximately USD 59 million) in cash, with the option to purchase the remaining shares of Delek Group for a further consideration of NIS 2.3 billion (approximately USD 653 million) in cash, subject to certain adjustments for interest and earnings. Should SIIG decide to exercise its call option, the acquisition would be expected to close in 2018.

A.M. Best will further assess the impact on the rating fundamentals and strategic direction of SIIG and its subsidiaries following a decision on the acquisition.

The negative outlook of these ratings reflects A.M. Best’s view of the materially weaker credit profile of China Minsheng Investment Group Corp., Ltd, SIIG’s ultimate parent company, with concerns over its prospective financial flexibility driven by high financial leverage, and the impact this could have on the financial strength of SIIG and its subsidiaries.

The following Long-Term Issue Credit Rating also remains unchanged following the transaction announcement, with a negative outlook:

Sirius International Group, Ltd.

“bb+” on the USD 250 million non-cumulative perpetual preference shares

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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