A.M. Best Comments on Acquisition of Direct General Group.OLDWICK, N.J. -- A.M. Best Co. has commented on the proposed transaction regarding Direct General Group's (Direct General) announcement that its parent company, Direct General Corporation (Nashville, TN) [NYSE NYSE See: New York Stock Exchange : DRCT DRCT Direct ] has reached a definitive agreement to be acquired by Elara Holdings Inc. (Delaware), an affiliate of Fremont Partners (Fremont) and Texas Pacific Group (TPG TPG Texas Pacific Group TPG Tapping TPG Transports Publics Genevois (Geneva, Switzerland public transportation) TPG Test Pattern Generator TPG TNT Post Group TPG Trésorier Payeur Général ). The proposed transaction is being funded primarily by equity capital, and to a lesser extent, term debt and trust preferred securities. The transaction is expected to be completed during the first half of 2007, pending government and regulatory approvals as well as other customary closing conditions. Consummation of the transaction is conditioned upon Elara closing on the committed debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay . As a result of the proposed acquisition, A.M. Best anticipates that the financial strength ratings (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) and issuer credit ratings (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of Direct General's four property/casualty members will remain unchanged. The members include Direct General Insurance Group (Nashville, TN); Direct General Insurance Company (Aiken, SC) and its wholly-owned separately rated subsidiary, Direct General Insurance Company of Mississippi (Jackson, MS); Direct Insurance Company (Nashville, TN); and Direct General Insurance Company of Louisiana CODE, OF LOUISIANA. In 1822, Peter Derbigny, Edward Livingston, and Moreau Lislet, were selected by the legislature to revise and amend the civil code, and to add to it such laws still in force as were not included therein. (Baton Rouge Baton Rouge (băt`ən r  zh) [Fr.,=red stick], city (1990 pop. 219,531), state capital and seat of East Baton Rouge parish, SE La. , LA). A.M. Best expects that Direct General's risk-adjusted capital, financial leverage, operating performance and reserve adequacy measures will remain within acceptable ranges to support its current ratings. However, it is expected that A.M. Best will revise the rating outlooks to stable from positive, which contemplates the impact of business plans and dividend projections provided by management. Consistent with the announcement, A.M Best views the transaction as an opportunity for Direct General to enhance the operating performance of its core business. Also, through the cross-selling of complementary financial products, greater diversification is anticipated, which should position Direct General to become a broader financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. enterprise. The FSRs of B (Fair) and the ICRs of "bb+" are unchanged for the following members of Direct General Group: * Direct General Insurance Group * Direct General Insurance Company * Direct General Insurance Company of Mississippi * Direct Insurance Company The FSR of B (Fair) and the ICR of "bb" are unchanged for Direct General Insurance Company of Louisiana. The ICR of "b" is unchanged for Direct General Corporation. For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 3,000 individual property/casualty companies and A.M. Best groups, please visit www.ambest.com/pc. 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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