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A.M. Best Places the Ratings of AXIS Capital Holdings Limited and Its Subsidiaries under Review with Negative ImplicationsA.M. Best has placed under review with negative implications the financial strength rating (FSR) of A+ (Superior) and the issuer credit ratings (ICR) of "aa-" of AXIS Specialty Limited (AXIS) and its operating affiliates. Concurrently, the ICR of "a-" of AXIS Capital Holdings Limited (ACHL) (both domiciled in Hamilton, Bermuda) [NYSE: AXS] has been placed under review with negative implications following the recent announcement that ACHL and PartnerRe Ltd have signed a definitive amalgamation agreement. A.M. Best has also placed under review with negative implications the existing debt ratings of ACHL. (See below for a detailed list of the companies and ratings.) The under review status reflects A.M. Best's concern associated with this merger's size, scope and complexity. Along with combining two company cultures under one leadership team, the successful integration will need to be completed in a timely manner and optimize operational and systems infrastructure while retaining key personnel. During the integration period, A.M. Best believes there is greater inherent risk to the ongoing operations of the combined company. This transaction has inherent execution risk although this is partially mitigated by the collaborative nature of both management teams. Looking beyond the aforementioned risk factors, there is a fundamentally strong strategic rationale for this transaction. This combination brings two strong companies together that will have enhanced scale, a more diversified product mix and the transaction offers the ability to generate meaningful capital efficiencies and synergies. The under review status will be removed once the transaction has closed and A.M. Best reviews the final integration plan. Factors that could lead to a rating downgrade or an outlook revision to negative include A.M.Best's view that the transaction and integration plan represent a potentially material risk to the organization. Factors that could lead to a stabilization of the ratings include a sound and streamlined integration plan and retention of key personnel. The FSR of A+ (Superior) and the ICRs of "aa-" for AXIS Specialty Limited and its following operating affiliates have been placed under review with negative implications:
The following debt ratings have been placed under review with negative implications:
AXIS Capital Holdings Limited-
AXIS Specialty Finance LLC (guaranteed by AXIS Capital Holdings
Limited)- The following indicative ratings under the current shelf registration have been placed under review with negative implications:
AXIS Capital Holdings Limited- 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. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. Key insurance criteria reports utilized:
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. |
