Ratings Roundup: Southern Rock, KOT, Ceska

February 8, 2008

Standard & Poor’s Ratings Services has revised the outlook on the long-term counterparty credit and insurer financial strengths ratings on Gibraltar-based non-life insurer Southern Rock Insurance Co. Ltd. to positive from stable. S&P said it made the move based on “our expectation that improving operating performance and competitive position may permit an upgrade in the medium term. At the same time, we affirmed the ‘BB’ long-term ratings. The ratings reflect the company’s high financial risk tolerance, its marginal capitalization and financial flexibility, and its strategic dependence on reinsurers and co-insurers.

Standard & Poor’s Ratings Services has affirmed its ‘A-‘ long-term counterparty credit rating and financial strength rating on Kot Insurance Co. A.G. with a stable outlook. “The ratings on Kot are based on a guarantee issued by the controlling company, Petroleos Mexicanos (PEMEX; LC: A-/Stable/–; FC: BBB+/Stable/–), a decentralized entity from the United Mexican States’ government; strong capitalization levels; and good reinsurance policies,” explained S&P credit analyst Alfonso Novelo.

Standard & Poor’s Ratings Services has raised its counterparty credit and insurer financial strength ratings on Ceska pojistovna a.s. (Ceska) to ‘A’ from ‘BBB’. S&P also raised the rating on Ceska’s Czech koruna (CZK) 500 million, five-year, fixed-coupon senior unsecured bond, to ‘A-‘ from ‘BBB-‘, and the counterparty credit and insurer financial strength ratings and the rating on Ceska’s CZK500 million debt issue were removed from CreditWatch, where they had been placed with positive implications on April 27, 2007. The outlook for the ratings is stable. “This follows the completion of the transaction between Assicurazioni Generali SpA (Generali; AA/Stable/–) and PPF Group N.V. (PPF Group; not rated), announced in April 2007,” said S&P. “The ratings on Ceska are supported by the ratings on its ultimate majority parent. Ceska’s immediate parent, Generali PPF Holding (not rated), is 51 percent owned by Generali and 49 percent owned by PPF Group. S&P credit analyst Paul Bradley noted: “Standard & Poor’s regards Ceska as strategically important to Generali and, therefore, factors three notches of implied group support to the ratings, to reflect support from this higher rated entity.”

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