A.M. Best Affirms Ratings of Maiden Holdings, Ltd. and Its Subsidiaries
May 30 2012 - 10:30AM
Business Wire
A.M. Best Co. has affirmed the financial strength rating
(FSR) of A- (Excellent) and issuer credit ratings (ICR) of “a-” of
the property/casualty subsidiaries of Maiden Holdings, Ltd.
(Maiden Holdings) (Hamilton, Bermuda) [NASDAQ: MHLD] also known as
Maiden Group (Maiden). Concurrently, A.M. Best has affirmed
the ICR of “bbb-” of Maiden Holdings.
Additionally, A.M. Best has affirmed the ICR and senior debt
ratings of “bbb-” of Maiden Holdings North America, Ltd.
(Maiden NA) (Delaware), a direct, wholly owned subsidiary of Maiden
Holdings. Maiden NA’s senior notes are fully and unconditionally
guaranteed by Maiden Holdings. At the same time, A.M. Best has
assigned indicative ratings of “bbb-” to senior debt, “bb+” to
subordinated debt, “bb” to junior subordinated debt and “bb” to
preferred stock of the recently filed shelf registration of Maiden
Holdings and Maiden NA. The outlook for all ratings is stable. (See
below for a detailed list of the companies and ratings.)
The ratings of Maiden reflect its consistently profitable
underwriting and operating performance along with its solid
risk-adjusted capitalization, in part due to capital contributions
from Maiden Holdings and the operational benefits that Maiden
derives as a quota share partner with AmTrust Financial
Services, Inc.’s (AFSI) Bermuda reinsurance subsidiary,
AmTrust International Insurance, Ltd., (AII) and American
Capital Acquisition Corporation (ACAC).
Partially offsetting these positive rating factors are the
execution risk faced by Maiden in achieving its business plans and
integrating newer business, as well as the continuing competitive
environment in its core reinsurance markets.
Maiden Holdings’ adjusted debt-to-total capital of 26.9% and
adjusted debt-to-total tangible capital of 29.6% at March 31, 2012,
were within A.M. Best’s guidelines at the company’s current
ratings. In addition, Maiden Holdings’ interest coverage ratio
remains adequate for its ratings.
Key rating factors that may lead to positive rating actions
include the organization producing operating results that exceed
its peers for an extended period of time along with the
strengthening of the group’s risk-adjusted capitalization. However,
factors that may lead to negative rating actions include a trend of
increasingly deteriorating underwriting and operating performance
to a level below its peers or an erosion of surplus to an extent to
cause a significant decline in risk-adjusted capitalization.
The FSR of A- (Excellent) and ICRs of “a-” have been affirmed
for the following property/casualty subsidiaries of Maiden
Holdings, Ltd.:
- Maiden Insurance Company
Ltd.
- Maiden Reinsurance Company
- Maiden Specialty Insurance
Company
The following debt ratings have been affirmed:
Maiden Holdings North America, Ltd.—
-- “bbb-” on $100 million 8.0% senior unsecured notes, due
2042
-- “bbb-” on $107 million 8.25% senior unsecured notes, due
2041
The methodology used in determining these ratings is Best’s
Credit Rating Methodology, which
provides a comprehensive explanation of A.M. Best’s rating process
and contains the different rating criteria employed in the rating
process. Key criteria utilized include: “Risk Management and the
Rating Process for Insurance Companies”; “Insurance Holding Company
and Debt Ratings”; “Understanding BCAR for Property/Casualty
Insurers”; “Catastrophe Analysis in A.M. Best Ratings”; “The
Treatment of Terrorism Risk in the Rating Evaluation”; and “Rating
Members of Insurance Groups.” Best’s Credit Rating Methodology can
be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and
most authoritative insurance rating and information source. For
more information, visit www.ambest.com.
Copyright © 2012 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
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