A.M. Best Assigns Rating to VASCO Re 2006 Ltd.'s Senior Debt.OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "bb" to the $50 million senior secured floating rate notes, due June 5, 2009, issued by VASCO Re 2006 Ltd. (the issuer), a newly created Cayman Islands Cayman Islands (kā`mən), British dependency (2005 est. pop. 44,300), 100 sq mi (259 sq km), comprising three islands in the West Indies. exempted company licensed as a Class B insurer. The primary business purpose for the creation of the issuer is for the issuance of the notes and servicing and performance of the various agreements entered into, including the 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. agreement, bank deposit agreement and other related activities. Proceeds from the issuance of the notes will be deposited into a collateral trust account and will be available to pay any loss payments required to be made by the issuer under a multi-year reinsurance agreement entered between the issuer and Balboa Balboa, town (1990 pop. 2,751), Colón prov., in the former Panama Canal Zone, on the Gulf of Panama. The port for Panama City, Balboa was the administrative headquarters of the Panama Canal Zone. It was also the site of a U.S. navy base (closed 1999). Insurance Company and its affiliates (ceding cede tr.v. ced·ed, ced·ing, cedes 1. To surrender possession of, especially by treaty. See Synonyms at relinquish. 2. insurer). The proceeds will be deposited into an eligible bank institution that has a long-term deposit rating that meets or exceeds the minimum pre-established rating threshold. 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 ceding insurer. These notes further strengthen the ceding insurer's solid reinsurance program. The rating of the ceding insurer remains unaffected. The assigned rating represents an opinion as to the issuer's ability to meet its financial obligations to the note holders when due. The rating considers the probability of loss payments being made when U.S. hurricanes, within the applicable risk period, have caused insured personal and commercial property losses in the covered territories to exceed a stated threshold amount. 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 the ceding insurer, who under the reinsurance agreement, is responsible for making periodic payments (premium and expense reimbursements) to the issuer. Using its U.S. hurricane model and near-term sensitivity analysis, catastrophe modeler AIR Worldwide Corporation has estimated the annual attachment probability (the relative frequency of net losses exceeding a particular loss amount) at 1.38%, at which time indemnity payments to the ceding insurer will commence. 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. 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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