A.M. Best Places Ratings of HDI and Subsidiaries of Gerling Under Review Following Plans of Merger.OLDWICK, N.J. -- A.M. Best Co. has placed the ratings of HDI HDI Human Development Index (UNDP yardstick of human welfare) HDI Help Desk Institute HDI Humpty Dumpty Institute (New York, New York) HDI High Density Interconnect Haftpflichtverband Deutsch Industrie (HDI) (Germany) and those of its main subsidiaries under review with negative implications. The rating actions were a result of the company's announcement that it plans to acquire Gerling Beteiligungs-GmbH (GBG GBG Göteborg (Sweden) GBG Guernsey (International Auto Identification) GBG Good Beer Guide (UK pub guidebook published annually by the Campaign for Real Ale) ) (Germany). A.M. Best has also placed the ratings of the main subsidiaries of GBG under review with developing implications. (See below for a detailed list of affected ratings.) The rating action was taken so that A.M. Best can fully assess the impact of the acquisition. A.M. Best believes that the acquisition is going to provide HDI with greater presence in the German market, especially the life and industrial risks segments. The consolidated entity will benefit from greater economies of scale despite the incurring one-off restructuring costs. A.M. Best believes that risk-adjusted capitalisation will be adversely impacted and would be seeking to clarify the levels of goodwill and the method of financing the transaction, as well as the level of stand-alone capitalisation of Gerling-Konzern Lebensversicherungs-AG prior to resolving the under review status. Finally, A.M. Best believes that the acquisition is likely to have increased execution risk, especially due to the focus of the primary insurance entities of both HDI and GBG in Germany. 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. ) of A (Excellent) and the 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 "a" of the following entities have been placed under review with negative implications: --HDI Haftpflichtverband Deutsch Industrie --HDI Industrie Versicherung AG --Hannover Rueckversicherung AG --Hannover 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. (Dublin) Limited --Hannover Reinsurance (Ireland) Limited --Hannover Life Reassurance Company of America --Hannover Life Reassurance (Ireland) Ltd --Hannover Re (Bermuda) Ltd --Insurance Corporation of Hannover --E+S Rueckversicherungs-AG --E+S Reinsurance (Ireland) Ltd The ICR of "a" of the following subsidiaries of HDI has been placed under review with negative implications: --Hannover Finance Inc. (United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ) --Hannover Finance (Luxembourg) S.A. The ICR of "bbb+" of HDI's main subsidiary-holding, Talanx Aktiengesellschaft, has been placed under review with negative implications. The ratings of the following debt instruments issued by HDI and its subsidiaries have been placed under review with negative implications: Talanx Aktiengesellschaft-- --"bbb-" on EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 350 million callable Callable Applies mainly to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. subordinated notes due June 2025 Hannover Finance Inc. (United States)-- --"bbb+" on USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 400 million floating rate notes due March 2029 Hannover Finance (Luxembourg) S.A.-- --"bbb" on EUR 500 million junior subordinated notes --"bbb+" on EUR 350 million subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before due March 2031 --"bbb+" on EUR 750 million subordinated due March 2024 The FSR of A- (Excellent) and ICR of "a-" of the main non-life GBG subsidiary, Gerling-Konzern Allgemeine Versicherungs, has been placed under review with developing implications. The FSR of A- (Excellent) of Gerling America Insurance Company has been placed under review with developing implications. The following rating has been placed under review with developing implications: Gerling Konzern Allgemeine Versicherungs-- --"bbb" on EUR 250 million subordinated notes due August 2024 For 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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