A.M. Best Downgrades Ratings of PartnerRe Ltd. and Its Subsidiaries; Remains Under Review With Negative Implications
August 04 2015 - 12:45PM
Business Wire
A.M. Best has downgraded the financial strength rating
(FSR) to A (Excellent) from A+ (Superior) and the issuer credit
ratings (ICR) to “a+” from “aa-” of Partner Reinsurance Company
Ltd. (PartnerRe) and its affiliates. A.M. Best also has
downgraded the ICR to “bbb+” from “a-” and the issue ratings of
PartnerRe’s parent, PartnerRe Ltd. [NYSE: PRE]. This rating
action follows the announcement that PartnerRe Ltd and AXIS
Capital Holdings Limited (AXIS) have terminated a definitive
amalgamation agreement and that PartnerRe Ltd has entered into a
definitive agreement to be acquired by Italian investment firm
EXOR, S.p.A. The ratings remain under review with negative
implications. PartnerRe Ltd and PartnerRe are domiciled in
Hamilton, Bermuda. (See below for a detailed list of the companies
and ratings.)
The rating action is based on existing A.M. Best concerns
regarding PartnerRe’s concentration in reinsurance and lack of a
diversified product platform, in particular, the ability to provide
both primary and reinsurance solutions. The proposed merger with
AXIS would have begun to address these issues and with that
transaction terminated these concerns are brought back to the
forefront. Additionally, A.M. Best is concerned that any such
diversification initiatives at PartnerRe have been delayed because
of the now terminated merger agreement with AXIS. These concerns
are magnified given the current challenging reinsurance market
conditions.
The under review status remains due to remaining uncertainty
regarding senior leadership at PartnerRe, particularly the role of
CEO and additional information required regarding EXOR’s plans for
PartnerRe. The under review status will be removed after the
closing of the EXOR–PartnerRe transaction.
The FSR has been downgraded to A (Excellent) from A+ (Superior)
and the ICRs have been downgraded to “a+” from “aa-” and remain
under review with negative implications for Partner Reinsurance
Company Ltd. and its following affiliates:
- Partner Reinsurance Company of the
U.S.
- PartnerRe Insurance Company of New
York
- PartnerRe Ireland Insurance
Limited
- Partner Reinsurance Europe
SE
- PartnerRe America Insurance
Company
The following issue ratings have been downgraded and remain
under review with negative implications:
PartnerRe Ltd.—
-- to “bbb-” from “bbb” on $230 million 6.5% preferred shares,
Series D
-- to “bbb-” from “bbb” on $325 million 7.25% preferred shares,
Series E
-- to “bbb-” from “bbb” on $250 million 5.875% preferred shares,
Series F
PartnerRe Finance A LLC—
-- to “bbb+” from “a-” on $250 million 6.875% senior unsecured
notes, due 2018
PartnerRe Finance B LLC—
-- to “bbb+” from “a-” on $500 million 5.5% senior unsecured
notes, due 2020
PartnerRe Financial II, Inc.—
-- to “bbb-” from “bbb” on $250 million 6.44% junior
subordinated capital efficient notes, due 2066
The following indicative ratings under the shelf registration
have been downgraded and remain under review with negative
implications:
PartnerRe Ltd.—
-- to “bbb+” from “a-” on senior unsecured debt
-- to “bbb” from “bbb+” on subordinated debt
-- to “bbb-”from “bbb” on preferred stock
PartnerRe Financial II, Inc. (guaranteed by PartnerRe
Ltd.)—
-- to “bbb+” from “a-” on senior unsecured debt
-- to “bbb” from “bbb+” on subordinated debt
-- to “bbb-” from “bbb” on preferred stock
PartnerRe Capital Trust II and III (guaranteed by
PartnerRe Ltd.)—
-- to “bbb” from “bbb+” on trust preferred securities
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 visit A.M.
Best’s Ratings & Criteria Center.
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 © 2015 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20150804006344/en/
A.M. Best Company, Inc.Scott Mangan, 908-439-2200,
ext. 5593Senior Financial
Analystscott.mangan@ambest.comorGreg Reisner,
908-439-2200, ext. 5224Managing Senior Financial
Analystgreg.reisner@ambest.comorChristopher Sharkey,
908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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