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A.M. Best Assigns Debt Rating to Fairfax (US) Inc.'s Senior Unsecured Notes; Comments on Regulatory InquiryOLDWICK, N.J. --(Business Wire)-- A.M. Best has assigned an issuer credit rating of "bbb" to Fairfax (US) Inc. (headquartered in Delaware), a subsidiary of Fairfax Financial Holdings Limited (Fairfax) [TSX: FFH and FFH.U] (Toronto, Canada), and a debt rating of "bbb" to its $300 million 4.875% senior unsecured notes due 2024. Fairfax is the guarantor of the notes. The outlook assigned to the ratings is stable. Fairfax (US) Inc.'s ratings reflect its position as an intermediate holding company in the Fairfax organization and the implicit and explicit benefits of being part of the Fairfax enterprise. It is Fairfax (US) Inc.'s intention to use the net proceeds primarily to refinance certain indebtedness of Fairfax and its subsidiaries. Following the notes issue, financial leverage and coverage measures at Fairfax are expected to remain within A.M. Best's guidelines for the assigned ratings. In addition,A.M. Best comments that the ratings of Fairfax and its subsidiaries are unchanged following Fairfax's disclosure that The Autorité des marchés financiers, the securities regulatory authority in the Province of Quebec, is conducting an investigation of Fairfax, its CEO, Prem Watsa, and its President, Paul Rivett. The investigation concerns the possibility of illegal insider trading and/or tipping (not involving any personal trading by the individuals) in connection with a Quebec transaction. A.M. Best will continue to monitor the situation as further details concerning the investigation are disclosed and will take future rating actions if warranted. 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. 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 © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED. |
