S&P Cuts Lumbermens Mutual Casualty Rating to ‘D’

Standard & Poor’s Ratings Services has revised its ratings on beleaguered Lumbermens Mutual Casualty Co.’s $100 million 8.45 percent surplus notes due Dec. 1, 2097, and the $200 million 8.3 percent surplus notes due Dec. 1, 2037, to ‘D’ from ‘C.’

The ratings from credit watch where they were placed Feb. 18, 2003.
The action follows Lumbermens non-payment on the notes’ interest, according to S&P’s analyst John Iten.

On March 25, 2003, the company disclosed that the Illinois Insurance Department had denied its request to make further interest payments on these notes. On March 26, 2003, Standard & Poor’s lowered its ratings on Lumbermens surplus notes to ‘C’ from ‘CCC’ and stated then that the ratings on these notes would be revised to ‘D’ as the interest due dates were reached.

The $400 million 9.15 percent notes due 2026 will be revised to ‘D’ following the expected non-payment of interest on July 1, 2003.