A.M. Best Downgrades Various Financial Strength and Debt Ratings of Trenwick Group.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 3, 2003 A.M. Best Co. has downgraded the financial strength ratings to C (Weak) of Trenwick Group Ltd.'s (NYSE NYSE See: New York Stock Exchange : TWK TWK Tübinger Wahrnehmungskonferenz (German: Tübingen Perception Conference) TWK Tweak TWK Tweak File ) (Bermuda) ongoing operating subsidiaries and has withdrawn the financial strength ratings of Trenwick's operating companies--which are now in runoff--and assigned each a NR-3 rating (Rating Procedure Inapplicable in·ap·pli·ca·ble adj. Not applicable: rules inapplicable to day students. in·ap ). Prior to the withdrawal of these ratings, A.M. Best had downgraded the financial strength ratings of the runoff Runoff The procedure of printing the end-of-day prices for every stock on an exchange onto ticker tape. Notes: If the "tape is late" then it can take a long time to print off all the closing prices. companies to C (Weak). Concurrent with these actions, all debt ratings relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc securities issued by Trenwick's various holding companies have also been downgraded and assigned debt ratings of "c". All ratings remain under review with negative implications. These rating actions follow the company's announcement that it has strengthened loss reserves by $107 million in fourth quarter 2002. That action follows Trenwick's $90.7 million strengthening in third quarter 2002 and further depletes the low levels of surplus still remaining within the operating companies operating company A business that engages in transactions with outsiders. and elevates operating leverages to unacceptable levels. Additionally, Trenwick has no capacity to settle and is in renegotiation discussions with its creditors related to its $75 million senior note obligations, which are due April 1, 2003. Failure to renegotiate re·ne·go·ti·ate tr.v. re·ne·go·ti·at·ed, re·ne·go·ti·at·ing, re·ne·go·ti·ates 1. To negotiate anew. 2. To revise the terms of (a contract) so as to limit or regain excess profits gained by the contractor. this note by March 1 will put Trenwick in default of its Letter of Credit (LOC LOC - lines of code ) facility, which is necessary to support its Lloyd's operations. If the LOC facility goes into default, A.M. Best believes that this may impede the group's ability to sustain its remaining underwriting operations over the long term, which includes its Lloyd's facility and a fronting arrangement between Trenwick America Corporation and Chubb Re. These ongoing businesses are Trenwick's only operations potentially capable of generating revenue and improving the group's weak financial position. A.M. Best will continue to monitor Trenwick's ability to meet near-term debt obligations, adequacy of the company's loss reserves as well as any further operating issues, which may arise. Due to the considerable uncertainties all ongoing ratings remain under review with negative implications. For a complete listing of Trenwick's financial strength and debt ratings, visit http://www.ambest.com/press/020303trenwick.pdf. 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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