A.M. Best Assigns Rating to Atlas Re III p.l.c.'s Principal at Risk Variable Notes.OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "bb+" to the EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 120 million principal-at-risk variable rate notes (notes) due January 10, 2010, issued by Atlas 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. III p.l.c. (the issuer), a newly created Irish special purpose public limited company. The rating outlook is stable. The primary business purpose for the creation of the issuer is for the issuance of the notes and the service and performance of various agreements entered into, including the retrocessional agreement between the issuer and Scor (the cedant) providing coverage for European windstorms within the specific covered area and Japanese earthquakes and the swap agreement entered into between the issuer and Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. International (swap counterparty) and other related covenants. The issuer, through issuing the notes and arranging the retrocessional agreement, will provide the cedant with up to EUR 120 million of three-year second and subsequent event source of retrocessional capacity. Proceeds from the issuance of the notes will be deposited into a collateral trust account and will be available to pay amounts owed by the issuer to Scor under the retrocessional agreement. This includes amounts owed to the swap counterparty; loss payments required to be made by the issuer under a multi-year retrocessional agreement; and payments in respect of such notes under an indenture between the issuer and the Bank of New York The Bank of New York, abbrieviated to BNY, was a global financial services company that existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The bank now continues under the new name of The Bank of New York Mellon Corporation. , the indenture trustee, which has a long-term deposit rating that meets or exceeds the minimum pre-established rating threshold. All funds in the collateral trust account will be invested as per the investment guidelines set in the indenture, which governs the selection of the directed investment(s) to be acquired. The notes have limited recourse Limited recourse A term describing a type of loan in which the lender has limited or no claim against the parent company if the collateral is insufficient to repay the debt. See:Nonrecourse. to certain assets of the issuer and are without recourse A phrase used by an endorser (a signer other than the original maker) of a negotiable instrument (for example, a check or promissory note) to mean that if payment of the instrument is refused, the endorser will not be responsible. to the cedant. The assigned rating represents A.M. Best's opinion as to the issuer's ability to meet its financial obligations to security holders when due. The rating considers the probability of loss payments exceeding a stated threshold amount, which will be made to the cedant when second and subsequent qualified modeled loss events occur within the applicable three-year risk period. The annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. attachment probability of both the activation and the event attachment point were calculated based on modeled losses on a notional portfolio that mirrors Scor's actual exposure using a catastrophe model developed by EQECAT (catastrophe modeler), which is subject to escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. . In addition, the rating takes into consideration the creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. of Scor, who under the retrocessional agreement, is responsible for making periodic payments (premium and expense reimbursements) to the issuer. For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. 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. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion