Best, S&P Assign Ratings to Transatlantic $350 Million Debt Issue

November 20, 2009

A.M. Best Co. has assigned a debt rating of “bbb” to the recently issued $350 million 8.00 percent 30-year senior unsecured notes due 2039 of Transatlantic Holdings, Inc. (TRH) with a stable outlook. Standard & Poor’s Ratings Services assigned the issue.

Best noted that the “proceeds from the debt offering will be used for general corporate purposes, which depending on market conditions, may include the repurchase of common shares and retirement of a portion of the company’s existing 5.75 percent senior notes due 2015. Transatlantic’s debt-to-adjusted capital ratio and fixed charge coverage remain relatively comfortable within the range that is commensurate with the assigned rating.”

S&P noted that the “pro forma debt-to-capital ratio will be 20.6 percent-22.1 percent, with interest coverage of about 10.8x. These pro forma leverage and coverage metrics are still supportive of the rating.”

The rating agency also observed that “through the first nine months of 2009, TRH reported strong earnings, with pretax income of $424 million, compared with $98 million during the same period in 2008. As of Sept. 30, 2009, the combined ratio was strong at 93.5 percent, and the return on revenue was 15.9 percent, compared with 98.9 percent and 10.6 percent, respectively, during the same period in the previous year.

“The ratings on TRH and its core subsidiaries are based on the group’s well-diversified mix of business, strong reputation with brokers and clients, strong and disciplined underwriting culture, and very strong liquidity.

Sources: A.M. Best – and Standard & Poor’s –

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