Ratings: Northwind/Tailwind, Meadowbrook, Hartford, Farm & City, AIG

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A.M. Best Co. has removed the under review with negative implications status and assigned a negative outlook to the debt rating of “aaa” on $800 million of floating rate insured notes, due December 1, 2037 issued by Northwind Holdings, LLC, a Delaware limited liability company and a wholly owned subsidiary of Unum Group. In a related decision Best has also removed the under review with negative implications status and assigned a negative outlook to the debt rating of “aaa” on $130 million of Series A floating rate senior secured notes, due 2036 (notes) issued by Tailwind Holdings, LLC (Tailwind Holdings), a Delaware limited liability company and a wholly owned subsidiary of Unum Group (Unum). Both entities were formed to “for the limited purpose of holding the stock of Tailwind Re, Inc., issuing the notes and engaging in other activities incidental to the performance of its duties,” Best explained.

A.M. Best Co. commented that the financial strength rating (FSR) of ‘A-‘ (Excellent) and issuer credit ratings (ICR) of “a-” of Michigan-based Meadowbrook Insurance Group and its members remain unchanged. The ICR of “bbb-” of the publicly traded parent holding company, Meadowbrook Insurance Group, Inc., also remains unchanged. The outlook for all ratings is stable. Best explained that these decisions follow the recently announced planned definitive merger agreement between Meadowbrook and Ohio’s ProCentury Corporation, which is valued at approximately $272.6 million in cash and stock to be paid to ProCentury’s shareholders.

Standard & Poor’s Ratings Services has assigned its ‘A’ senior unsecured debt rating to Hartford Financial Services Group Inc.’s proposed $500 million senior unsecured notes. The senior notes will be fixed rate with final maturity in 2018. “HIG will use the proceeds from this issue to pre-fund payments due at maturity of $425 million of 5.5 percent notes due in August 2008,” said S&P. “It intends to use the remainder of the funds for general corporate purposes and might partially pre-fund the outstanding $200 million senior debt maturing in November 2008.

A.M. Best Co. has withdrawn the financial strength rating (FSR) of A- (Excellent) and the issuer credit rating (ICR) of “a-” of Farm and City Insurance Company, following the completion of its merger with and into EMCASCO Insurance Company, a wholly owned subsidiary of EMC Insurance Group, Inc., which became effective December 31, 2007. All of the companies are domiciled in Des Moines, Iowa. Best noted: ” Historically a nonstandard automobile insurer, Farm & City ceased writing direct business and implemented non-renewal procedures on all existing business in 2004. However, the company continued to participate in the EMC Insurance Companies intercompany pooling agreement, receiving 1.5 percent of all pool business. As a result of the merger, EMCASCO assumed Farm & City’ s 1.5 percent participation interest in the intercompany pool.”

Fitch Ratings announced that all of American International Group, Inc.’s Issuer Default Ratings (IDR), along with all holding company ratings and subsidiary debt ratings including International Lease Finance and American General Finance, remain on Rating Watch Negative, following AIG’s announced fourth quarter-2007 financial results. Fitch noted that it had “originally placed AIG and subsidiary debt ratings on Rating Watch Negative on Feb. 11, 2008 following the company’s acknowledgement in an 8K filing that as of Dec. 31, 2007, its independent auditor believed that the company had a material weakness in internal controls related to the valuation of AIG Financial Products Corp.’s (AIG FP) super senior credit derivative portfolio. Obligations of AIG FP are guaranteed by AIG.”


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