A.M. Best Assigns Indicative Debt Ratings to Odyssey Re Holdings Corp.'s Shelf Registration.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 24, 2004 A.M. Best Co. has assigned indicative ratings of "bbb" to senior debt, "bbb-" to 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+" to preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. relating to the $400 million shelf registration filed by Odyssey Re Holdings Corp. (NYSE NYSE See: New York Stock Exchange : ORH ORH Worcester (Airport) ORH Operation Restore Hope ORH Worcester, MA, USA - Worcester /James D O'Brien Field (Airport Code) ) (New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of ). The financial strength rating of A (Excellent) of Odyssey 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. Group (Odyssey Re) (Delaware) and existing debt securities issued by ORH are unaffected by this rating action. The outlook for all ratings remains negative. The shelf offering, which will replace and replenish a previously filed shelf registration, provides financial flexibility to ORH, facilitating the issuance of debt securities, 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. and other securities, including equity securities, warrants, stock purchase contracts and units. Utilization of the shelf is not anticipated in the near term, and A.M. Best expects ORH to manage its financial leverage within its target level of 25% as it issues any additional debt instruments under its shelf registration. At year end 2003, financial leverage (debt plus preferred stock to adjusted capital) stood at 22.8%, supported by fixed charge and cash coverage ratios of 9.7 times and 6.8 times respectively--well within the acceptable ranges of its rating category. A.M. Best expects that ORH's coverage ratios will continue at similar strong levels as earnings momentum is sustained. Odyssey Re reported robust earnings in 2003, notwithstanding additional reserve strengthening for its 1997 to 2001 accident years. A.M. Best will reexamine re·ex·am·ine also re-ex·am·ine tr.v. re·ex·am·ined, re·ex·am·in·ing, re·ex·am·ines 1. To examine again or anew; review. 2. Law To question (a witness) again after cross-examination. the negative outlook in the near future after a full review of 2003 statutory results, including reserve adequacy and operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. . The following indicative debt ratings available under a new $400 million shelf registration have been assigned: Odyssey Re Holdings Corp.-- -- "bbb" on senior unsecured debt -- "bbb-" on subordinated debt -- "bb+" on preferred shares The financial strength ratings of A (Excellent) are unaffected for the following members of Odyssey Reinsurance Group: -- Odyssey America Reinsurance Corporation -- Clearwater Insurance Company (formerly Odyssey Reinsurance Corporation) -- Hudson Insurance Company The financial strength rating of A (Excellent) is unaffected for Hudson Specialty Insurance Company, a reinsured affiliate of Odyssey Reinsurance Group. The following debt ratings are unaffected: Odyssey Re Holdings Corp.-- -- "bbb" on $225 million 7.65% senior debentures/notes, due 2013 -- "bbb" on $110 million 4.375% convertible senior debentures, due 2022 For current Best's Ratings, independent data and analysis on more than 470 reinsurance companies, please visit http://www3.ambest.com/reinsurance/. For a list of A.M. Best's debt ratings, please visit http://www3.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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