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A.M. Best Affirms Ratings of Maiden Holdings Ltd. and Its SubsidiariesA.M. Best has affirmed the financial strength rating (FSR) of A- (Excellent) and the 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 and the debt rating of "bb" on its preferred stock. A.M. Best has also 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. The outlook for all ratings is positive. (See below for a detailed listing of companies and ratings.) Additionally, A.M. Best has affirmed the FSR of A- (Excellent) and the ICR of "a-" of Maiden Specialty Insurance Company (MSIC) (Raleigh, NC). The outlook for this rating is stable. The ratings reflects Maiden's consistently profitable underwriting and operating performance within its niche market segments, serving small- to medium-size insurance companies underwriting traditional lines of business. This helps distinguish Maiden from other reinsurers that have a greater proportion of their book of business in higher volatility segments such as catastrophe-exposed property reinsurance. Maiden's non-catastrophe property/casualty book is a well-diversified, low-volatility portfolio that generates more predictable and profitable performance, and has generated very consistent underwriting and operating returns. In addition, Maiden's ratings also reflect its solid risk-adjusted capitalization, due in part 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). Partially offsetting these positive rating factors is the continuing execution risk faced by Maiden in achieving its business plans due in part to the continuing competitive environment in its core reinsurance markets, as well as its client concentration, as AFSI accounts for approximately 65% of the group's 2014 total gross premiums. Maiden Holdings' adjusted debt-to-total capital, excluding accumulated other comprehensive income (AOCI) of 25.6%, and adjusted debt-to-total tangible capital (excludingAOCI) of 27.1% at March 31, 2015 were within A.M. Best's guidelines for the company's ratings. The ratings of MSIC reflect its run-off status following the 100% quota share reinsurance arrangement of Maiden's excess and surplus unit, including the transfer of MSIC staff and underwriting platform to Brit Insurance. Key rating factors that may lead to positive rating actions include the organization producing operating results that exceed its peers for an extended period, along with the strengthening of its risk-adjusted capitalization. Factors that may lead to negative rating actions include a trend of increasingly deteriorating underwriting and operating performance to a level below the group's peers, or an erosion of surplus that causes a significant decline in risk-adjusted capitalization. The FSR of A- (Excellent) and the ICRs of "a-" have been affirmed with a positive outlook for the following property/casualty subsidiaries of Maiden Holdings, Ltd.:
The following debt ratings have been affirmed with a positive outlook: Maiden Holdings, Ltd.- -- "bb" on $150 million 8.25% preferred stock -- "bb" on $165 million 7.25% mandatory convertible preferred stock, due 2016 Maiden Holdings North America, Ltd. (guaranteed by Maiden Holdings, Ltd.)- -- "bbb-" on $100 million 8.0% senior unsecured notes, due 2042 -- "bbb-" on $107 million 8.25% senior unsecured notes, due 2041 -- "bbb-" on $152 million 7.75% senior unsecured notes, due 2043 The following indicative ratings under the shelf registration have been affirmed with a positive outlook: Maiden Holdings North America, Ltd. (guaranteed by Maiden Holdings, Ltd.)- -- "bbb-" on senior unsecured debt -- "bb+" on senior subordinated debt -- "bb" on junior subordinated debt -- "bb" on preferred stock 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.
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