A.M. Best Places Rating of Tailwind Holdings, LLC Senior Secured Notes Under Review.

OLDWICK, N.J. -- A.M. Best Co. has placed the debt rating of "aaa" of the $130 million Series A floating rate senior secured notes, due 2036 (notes) issued by Tailwind Holdings, LLC (Tailwind Holdings), a Delaware limited liability company under review with negative implications. Tailwind Holdings is a wholly owned subsidiary of Unum Group (Unum) (Chattanooga, TN).

Tailwind Holdings was formed for the limited purpose of holding the stock of Tailwind Re, Inc. (Tailwind Re), issuing its notes and engaging in other activities incidental to the performance of its duties.

A.M. Best's previous review of the rating took into consideration the following: the financial strength rating (FSR) of Unum; Tailwind Holdings' stand-alone rating (i.e. rating of the notes without the support of the financial guarantor) of "a-"; and the work performed by Tillinghast, a business of Towers Perrin, including analysis and review of the adequacy of the reserves, the development of the policy cash flow projections and the risk factors and assumptions used in the deal model. Consideration also was given to the review of the structure, legal documentation and regulatory environment; an analysis of the underlying cash flows and actuarial assumptions including stress testing and sensitizing of the cash flow projections of the deal model based upon A.M. Best's view of various key factors such as mortality rates, recovery rates, interest rates and investment conditions; and the payment assurance of MBIA Insurance Corporation (MBIA), the financial guarantor, which insures the timely payment of scheduled interest and the repayment of principal at maturity to the note holders.

The under review status of Tailwind Holdings is solely due to A.M. Best's concerns regarding the financial and operational pressures currently being experienced by MBIA and the change in its short-term credit profile resulting from its subprime mortgage-related exposure. A.M. Best will continue to monitor MBIA's capital strengthening activities to assess any further impact to Tailwind Holdings' rating (both long and short-term).

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Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.