A.M. Best Assigns Debt Rating to Endurance Specialty Holdings Ltd.'s Senior Notes.OLDWICK, N.J. -- A.M. Best Co. has assigned a senior debt rating of "bbb" to Endurance Specialty Holdings Ltd's (Endurance) (NYSE NYSE See: New York Stock Exchange :ENH ENH Enhancement ENH Evanston Northwestern Healthcare (Illinois) ENH Evanston-Northwestern Hospital ) (Bermuda) $250 million 7% unsecured senior notes, due 2034. The rating outlook is stable. The financial strength rating of A (Excellent) of Endurance Specialty Insurance Ltd. (Hamilton, Bermuda) and its affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. is unaffected. The proceeds from the senior notes will be used to repay an existing $103 million term loan facility with the remainder used for general corporate purposes, including share repurchases and potential acquisitions. Following the transaction, Endurance's debt to adjusted capital will be approximately 12%, and fixed charge coverage is expected to remain in excess of 18 times. The rating reflects the company's excellent capitalization, with $1.8 billion of shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. at March 31, 2004, and solid operating results since its inception. These positive attributes stem from Endurance's development of a strong broker distribution network, selective acquisitions and the successful implementation of underwriting and risk management controls. Through the first three months of 2004, Endurance produced a combined ratio of 82%, while benefiting from higher market rates, light catastrophes and an unencumbered Unencumbered Property that is not subject to any creditor claims or liens. Notes: For example, if a house is owned free and clear (meaning the owner owes no mortgage to anyone), it is unencumbered. balance sheet. The company has established a diversified book of business, both geographically and by line. The operating strategy focuses on broker-sourced short-tail and long-tail lines, including property per risk, property catastrophe and casualty reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. . Furthermore, Endurance has expanded operations through the formation of affiliated companies in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and the United Kingdom. Partially offsetting these strengths is potential market pressure on pricing, which could dampen expected returns and exposure to low frequency, high severity property catastrophe losses. Furthermore, Endurance's short operating history has not fully tested management's underwriting expertise. For current Best's Ratings, independent data and analysis on more than 470 reinsurance companies, please visit http://www.ambest.com/reinsurance/. For a list of A.M. Best's debt ratings, please visit http://www.ambest.com/debtratings/. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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