A.M. Best Places Ratings of Arch Capital Group Ltd. and Its Subsidiaries under Review with Developing Implications
August 17 2016 - 12:34PM
Business Wire
A.M. Best has placed under review with developing
implications the financial strength ratings (FSR) of A+ (Superior)
and the issuer credit ratings (ICR) of “aa-” of Arch Reinsurance
Ltd. (Hamilton, Bermuda) [NASDAQ: ACGL] and its strategic
affiliates. Additionally, A.M. Best has also placed under review
with developing implications the ICRs of “a-” and the issue ratings
of Arch Capital Group Ltd. (Hamilton, Bermuda) and Arch
Capital Group (US) Inc. (Delaware). (See below for a detailed
listing of the companies and ratings).
These actions follow the announcement that Arch has entered into
a definitive agreement to acquire United Guaranty Corporation (UGC)
and AIG United Guaranty (Asia) Ltd. from their current owner,
American International Group, Inc. (AIG).
Arch will acquire UGC, a mortgage insurer that operates out of
Greensboro, NC, and AIG United Guaranty (Asia) Ltd. for
approximately $3.4 billion of cash and securities on Aug. 15, 2016.
Upon closing, Arch will provide a significant quota share to UGC
that will replace the current quota share provided by AIG. Also,
prior to closing and subject to regulatory approvals, the purchase
price may be reduced by a special dividend of $250 million from UGC
to AIG. The deal is intended to close during the third quarter of
2016 or the first quarter of 2017.
A.M. Best will monitor the transaction over its life cycle until
the deal closes and afterward when integration execution becomes
complete. During this period, A.M. Best may perform a rating action
if, in its opinion, it is perceived that the ratings on Arch are
compromised or strengthened based on this transaction or any
related or unrelated exogenous event.
The FSR of A+ (Superior) and the ICRs of “aa-” have been placed
under review with developing implications for Arch Reinsurance
Ltd. and its following affiliates:
- Arch Reinsurance Company
- Arch Insurance Company
- Arch Specialty Insurance
Company
- Arch Excess & Surplus Insurance
Company
- Arch Indemnity Insurance
Company
- Arch Insurance Canada Ltd.
- Arch Insurance Company (Europe)
Ltd
The following issue ratings have been placed under review with
developing implications:
Arch Capital Group Ltd—
-- “a-” on $300 million 7.35% senior unsecured notes, due
2034
-- “bbb” on $325 million 6.75% non-cumulative preferred shares,
Series C
The following indicative issue ratings have been placed under
review with developing implications for debt securities available
under the existing shelf registration:
Arch Capital Group Ltd—
-- “a-” on senior unsecured debt
-- “bbb+” on subordinated debt
-- “bbb” on preferred stock
Arch Capital Group (U.S.) Inc. (guaranteed by Arch
Capital Group Ltd)—
-- “a-” on senior unsecured debt
-- “bbb+” on subordinated debt
-- “bbb” on preferred stock
This press release relates to rating(s) that have been
published on A.M. Best’s website. For all rating information
relating to the release and pertinent disclosures, including
details of the office responsible for issuing each of the
individual ratings referenced in this release, please see A.M.
Best’s Recent Rating Activity web page.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2016 by A.M. Best Rating
Services, Inc. ALL RIGHTS RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20160817005969/en/
A.M. BestSteven M. ChiricoAssistant Vice President+1 908 439
2200, ext. 5087steven.chirico@ambest.comorRobert
DeRoseVice President+1 908 439 2200, ext.
5453robert.derose@ambest.comorChristopher
SharkeyManager, Public Relations+1 908 439 2200, ext.
5159christopher.sharkey@ambest.comorJim
PeavyAssistant Vice President, Public Relations+1 908 439 2200,
ext. 5644james.peavy@ambest.com
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