Ratings Recap: Torus, QBE (debt)

May 4, 2010

A.M. Best Co. has commented that the ratings of Bermuda-based Torus Insurance Holdings Limited and its operating subsidiaries are unchanged following Torus’ announcement that its subsidiary, Torus Insurance (Bermuda) Limited, will acquire Liechtenstein-based Glacier Insurance AG. [See IJ web site – https://www.insurancejournal.com/news/international/2010/05/04/109510.htm.] The transaction is subject to regulatory approval and is expected to be completed by the end of second quarter 2010. Best noted that following the acquisition, the consolidated risk-adjusted capitalization of Torus is expected to remain at an excellent level. Business written by Glacier Insurance AG will replace the group’s planned organic growth for certain insurance lines, and premium income for 2010 is likely to remain in line with A.M. Best’s initial expectations. The transaction will be funded through partial utilization of the capital raised earlier this year.” Best pointed out that Glacier Insurance AG “underwrites an established specialty portfolio (including aviation, space, property and marine risks), which complements Torus’ existing business. Additionally, the acquisition is likely to improve Torus’ competitive position within the European insurance market.”

A.M. Best Co. has assigned a debt rating of “bbb+” to the US$850 million 2.5 percent senior convertible securities issued by Australia’s QBE Insurance Group Limited, with a stable outlook. All remaining ratings of QBE-rated entities, including debt issuances, are unchanged. Best said it “expects the proceeds from the issue to be used to replace QBE’s existing senior convertible securities and to support the general corporate purposes of the group. The securities mature in 2030 and have an interest rate of 2.5 percent per annum. Financial and debt leverage ratios are expected to remain within A.M. Best’s tolerance levels.”

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