A.M. Best Co. announced that it has affirmed the financial strength rating of “A” (Excellent) and issuer credit ratings (ICR) of “a” of the reinsurance subsidiaries of Bermuda-based Platinum Underwriters Holdings, Ltd. Best also assigned a debt rating of “bbb” to $250 million of senior notes issued by Platinum (See IJ Website May 16,22 and 27) and affirmed the ICR of “bbb” of Platinum and all its existing debt ratings.
All the ratings have been removed from under review and assigned a stable outlook.
“These rating actions follow Platinum’s capital raising initiative, which resulted in the issuance of the $250 million 7.50 percent senior unsecured notes that are due in 2017,” said Best. “The proceeds from these notes improve the group’s overall capital position and, in particular, include a significant capital contribution to Platinum’s Bermuda subsidiary, Platinum Underwriters Bermuda Ltd., whose risk-adjusted capital had declined significantly as a result of the southeast windstorms in 2004.”
Best said it “considered the financial leverage and fixed charged coverage as part of its analysis, and it “expects Platinum to maintain its level of debt to capital below 30 percent and to maintain a fixed charge coverage in the mid to upper single digit range.”
The revised outlook reflects “A.M. Best’s view that Platinum has improved its risk-adjusted capital position to a level supportive of its current financial strength ratings. A.M. Best will monitor Platinum to ensure that as rates continue to soften in its core markets, the company maintains underwriting discipline and executes its business strategy,” the bulletin continued.
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