A.M. Best Places Credit Ratings of Renaissance Re Holdings Ltd and Its Subsidiaries Under Review with Developing Implications
November 02 2018 - 2:55PM
Business Wire
A.M. Best has placed under review with developing
implications the Financial Strength Rating (FSR) of A+ (Superior)
and the Long Term Issuer Credit Ratings (Long-Term ICR) of “aa-” of
Renaissance Reinsurance Ltd. (RenRe), Renaissance Reinsurance U.S.
Inc. (RenRe U.S.), RenaissanceRe Specialty U.S. Ltd. (RenRe
Specialty U.S. Ltd.), and Renaissance Reinsurance of Europe
Unlimited Company (Dublin, Ireland). Additionally, A.M. Best has
placed under review with developing implications the Long-Term ICR
of “a-” and all Long-Term Issuer Credit Ratings (Long-Term IR) of
RenaissanceRe Holdings Ltd. (RenaissanceRe) [NYSE: RNR]. A.M. Best
also has placed under review with developing implications the FSR
of A (Excellent) and the Long-Term ICR of “a+” of DaVinci
Reinsurance Ltd. (DaVinci) and the Long-Term ICR of “bbb+” of
DaVinci Re Holdings Ltd. All aforementioned companies are domiciled
in Bermuda unless otherwise specified. (See below for a detailed
listing of the Long-Term IRs.)
The rating actions follow the recent announcement that
RenaissanceRe has entered into a definitive agreement with Tokio
Marine Holdings, Inc. (Tokio Marine) under which it will acquire
Tokio Marine’s reinsurance platforms, which includes Tokio
Millennium Re AG (TMR) and Tokio Millennium Re (UK) Limited. If
closing tangible book value is unchanged from June 30, 2018, Tokio
Marine would receive USD 1.469 billion (or 1.02x TMR’s tangible
book value) in a combination of cash and stock. The agreement has
been approved by each side’s board of directors and the
transaction, subject to customary closing conditions and regulatory
approval, is expected to close in the first half of 2019.
The transaction is being financed with RenaissanceRe’s cash on
hand and equity. As part of the acquisition, Tokio Marine will
receive $250 million worth of RenaissanceRe shares. Additionally,
Tokio Marine has agreed to provide RenRe with a $500 million
adverse development cover that will protect TMR’s book of reserves
for five years.
In addition, RenaissanceRe announced that State Farm will
acquire $250 million in RenaissanceRe’s stock and become a 4.8%
owner of the company, in an investment transaction which is not
conditioned on the closing of the Tokio Marine reinsurance
platforms acquisition.
The ratings will remain under review pending completion of the
transaction and A.M. Best will continue to hold discussions with
RenaissanceRe management and monitor the company’s risk-adjusted
capitalization, operating performance, business profile and
enterprise risk management.
The following Long-Term IRs have been placed under review with
developing implications:
RenaissanceRe Holdings Ltd.— “bbb” on $250 million 6.08% Series
C perpetual preferred stock— “bbb” on $275 million 5.375% Series E
perpetual preferred stock
RenaissanceRe North American Holdings Inc. (guaranteed by
RenaissanceRe Holdings Ltd.)— “a-” on $250 million 5.75% senior
unsecured notes, due 2020
RenaissanceRe Finance Inc. (guaranteed by RenaissanceRe Holdings
Ltd.)— “a-” on $300 million 3.7% senior unsecured notes, due 2025—
“a-” on $300 million 3.45% senior unsecured notes, due 2027
The following indicative Long-Term IRs under the shelf
registration have been placed under review with developing
implications:
RenaissanceRe Holdings Ltd.— “a-” on senior unsecured— “bbb+” on
subordinated— “bbb” on preferred stock
RenaissanceRe Capital Trust II— “bbb” on trust preferred
securities
This press release relates to Credit Ratings 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. For
additional information regarding the use and limitations of Credit
Rating opinions, please view Understanding Best’s Credit
Ratings. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is a global rating agency and information provider
with a unique focus on the insurance industry. Visit
www.ambest.com for more information.
Copyright © 2018 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20181102005534/en/
A.M. BestMariza CostaSenior Financial
Analyst+1 908 439 2200, ext.
5154mariza.costa@ambest.comorChristopher
SharkeyManager, Public Relations+1 908 439 2200, ext.
5159christopher.sharkey@ambest.comorRobert
DeRoseSenior Director+1 908 439 2200, ext.
5453robert.derose@ambest.comorJim
PeavyDirector, Public Relations+1 908 439 2200, ext.
5644james.peavy@ambest.com
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