A.M. Best Assigns Indicative Debt Ratings to Montpelier Re Holdings Ltd.'s Shelf Registration.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 13, 2004 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. , "bbb-" 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 Montpelier Re Holdings Ltd.'s (Montpelier) (NYSE NYSE See: New York Stock Exchange :MRH MRH Memory Repeater Hub MRH Main Rotor Head (helicopters) MRH Multi-Resolution Homogenization MRH Mastic Roller Hybrid MRH Mataillos Rejuntaos de Hafen (MMO gaming guild) ) (Bermuda) recently filed $500 million universal shelf offering. A.M. Best has also affirmed the debt rating of "bbb" on Montpelier's $250 million 6.125% senior unsecured note, due 2013. Concurrently, A.M. Best has assigned an indicative debt rating of "bb+" preferred securities to MRH Capital Trust I (U.S.), which will be fully guaranteed by Montpelier. The outlook for all the ratings is stable. The shelf offering allows Montpelier to periodically sell debt securities, common stock, preferred stock 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, capital expenditures, acquisitions and other general corporate purposes. A.M. Best anticipates that any issuance under the registration will be used judiciously to support additional growth and financial flexibility. Following any debt issues, Montpelier's debt to adjusted capital is expected to remain in the mid-20% range with fixed charge coverage sustained in the high single digit range. Through the first nine months of 2003, Montpelier produced a combined ratio of 48%, 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 continued to adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. its original business plan, focusing on short-tail property business at higher attachment points. Business is diversified by line and geographically and includes property risk excess of loss, property pro-rata, property catastrophe excess of loss and qualifying quota share For This article is about quota shares (shares of the quota). For other usages of quota, see, see . A quota share is a specified number or percentage of the allotment as a whole (quota), that is prescribed to each individual entity (see Non-tariff barriers to trade). business with select Lloyd's syndicates. Furthermore, Montpelier's strategy of operating with a relatively small staff from a Bermuda-only platform continues to be a key driver for its relatively low expense infrastructure. Partially offsetting these strengths are the greater operating risks associated with a start-up entity and the recent increased availability of capacity to the property market, which is resulting in a leveling off of rates that could dampen expected returns. A.M. Best will continue to closely monitor Montpelier's operations and performance. The following indicative debt ratings have been assigned to the shelf registration:
Montpelier Re Holdings Ltd.--
-- "bbb" on senior unsecured debt
-- "bbb-" on subordinated debt
-- "bb+" preferred stock
MRH Capital Trust I (U.S.)
(guaranteed by Montpelier Re Holdings Ltd.)--
-- "bb+" on preferred securities
The following debt rating has been affirmed:
Montpelier Re Holdings Ltd.--
-- "bbb" on a $250 million 6.125% senior unsecured note,
due 2013
For a list of A.M. Best's debt ratings, please visit
http://www3.ambest.com/debtratings/.
For a list of A.M. Best's reinsurance ratings, please
visit http://www3.ambest.com/reinsurance/.
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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