A.M. Best Assigns Debt Ratings to Max Capital Group Ltd.'s Shelf Registration.OLDWICK, N.J. -- A.M. Best Co. has assigned indicative ratings of "bbb-" senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. , "bb+" subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". and "bb" preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. to Max Capital Group Ltd.'s (Max) [NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : MXGL] (Bermuda) recently filed $500 million universal shelf offering. Concurrently, A.M. Best has assigned indicative ratings of "bbb-" senior unsecured debt and "bb+" subordinated debt to Max USA Holdings Ltd and "bb" trust preferred securities to Max Capital Trust I, which will be fully guaranteed by Max. The outlook for all ratings is stable. The shelf offering allows Max to periodically sell debt securities, ordinary shares, preference shares and other securities with net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). to be used for working capital and general corporate purposes. A.M. Best anticipates that any issuance under the registration will be used judiciously ju·di·cious adj. Having or exhibiting sound judgment; prudent. [From French judicieux, from Latin i to support additional growth and financial flexibility. Following any debt issues, Max's debt-to-adjusted capital is expected to remain in the low 20% range with fixed charge coverage sustained in the high single digit range. Through the first six months of 2007, Max produced a combined ratio of 93%, while benefiting from its diversified mix of traditional property/casualty products along with its life and annuity business. Max's book of business, which predominately contains long-tail casualty lines, is fully supported by the company's excellent level of risk-based capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. and risk management controls. Partially offsetting these strengths is Max's predominately long-tail casualty orientation of its book of business. Due to the long-term nature of these lines, pricing and reserve adequacy may not be apparent for several years. Furthermore, A.M. Best believes that the potential variability of Max's alternative investment portfolio introduces an elevated risk factor to the company; however, this risk factor is included in Max's risk-based capital model. The following debt ratings have been assigned to the shelf registration:
Max Capital Group Ltd.--
-- "bbb-" on senior unsecured debt
-- "bb+" on subordinated debt
-- "bb" preferred stock
Max USA Holdings Ltd. (guaranteed by Max Capital Group Ltd.)--
--"bbb-" on senior unsecured debt
-- "bb+" on subordinated debt
Max Capital Trust I (guaranteed by Max Capital Group Ltd.)--
-- "bb" on preferred securities
For Best's Debt Ratings, all other Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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