A.M. Best Downgrades Ratings of IPCRe; Removes From Under Review and Assigns Stable Outlook.OLDWICK, N.J. -- The following two sentences should be deleted from the end of the second graph: The ratings of IPCRe, along with its operating subsidiaries and indicative debt ratings, will remain under review pending completion of its capital raising initiative. Upon completion of the capital plan, the ratings will likely be affirmed with a stable outlook. The corrected release reads: A.M. Best Co. has downgraded the financial strength rating (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. ) to A (Excellent) from A+ (Superior) 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. ) to "a" from "aa-" for 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. subsidiaries of IPC (1) (InterProcess Communication) The exchange of data between one program and another either within the same computer or over a network. It implies a protocol that guarantees a response to a request. Holdings Ltd. (IPCRe) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : IPCR IPCR International Peace and Conflict Resolution IPCR Inverse Polymerase Chain Reaction IPCR Intellectual Property and Competition Review (Australia) IPCR Institute for Pediatric Clinical Research ) (Bermuda). The rating action applies to IPCRe Limited (Bermuda) and IPCRe Europe Limited (Dublin, Ireland). Concurrently, A.M. Best has downgraded the ICR to "bbb" from "a-" of IPCRe and assigned indicative ratings to all debt securities recently filed under a $1.25 billion shelf registration. All ratings have been removed from under review and assigned a stable outlook. The downgrades reflect the decline in IPCRe's risk-adjusted capital position due to the group sustaining net losses from Hurricane Katrina and other catastrophe events that occurred in the third quarter of 2005 resulting in net losses and loss adjustment expenses of $856 million for the quarter. The group's reported shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. at September 30, 2005 was $1.081 billion. IPCRe had earlier announced it has raised approximately $600 million in capital through a common share and mandatorily convertible preferred public offering. A.M. Best does not believe that the approximately $600 million raised through this public offering is sufficient to support the volatility of the group's monoline property catastrophe focus at its former A+ (Superior) financial strength rating level. As a global property catastrophe reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. , IPCRe is subject to high severity losses due to catastrophic events on a worldwide basis. As a result of these events in 2005, property catastrophe pricing is expected to increase, which should benefit returns, barring any other catastrophic events. A.M. Best expects IPCRe to manage its risk-adjusted capital and financial leverage ratios within acceptable ranges to support its new financial strength and debt ratings. The FSR has been downgraded to A (Excellent) from A+ (Superior) for the following reinsurance subsidiaries of IPC Holdings Ltd.: --IPCRe Limited --IPCRe Europe Limited The ICR has been downgraded to "bbb" from "a-" for IPC Holdings Ltd. The ICRs have been downgraded to "a" from "aa-" for IPCRe Limited and IPCRe Europe Limited. The following indicative debt ratings have been assigned for securities available under shelf registration: IPC Holdings Ltd.-- --"bbb" on senior unsecured --"bbb-" on subordinated --"bb+" on 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. The following debt rating has been assigned with a stable outlook for the securities issued under the shelf registration: IPC Holdings Ltd.-- --"bb+" rating on $236.25 million 7.25% mandatory convertible Mandatory Convertible A type of convertible bond that has a required conversion or redemption feature. Either on or before a contractual conversion date, the holder must convert the mandatory convertible into the underlying common stock. preferred stock 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. |
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