A.M. Best Places Ratings of Trenwick Group Under Review With Negative Implications.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Aug. 24, 2001 A.M. Best Co. has placed the financial strength rating of A (Excellent) for the Trenwick Group, Bermuda, under review with negative implications. Additionally, A.M. Best has placed all related debt ratings as indicated below under review with negative implications. These actions follow the group's second quarter earnings release which reported additional reserve strengthening - the third such action since 1999. The under review status reflects A.M. Best's concern with regard to the adequacy of Trenwick's current loss reserve position and the uncertainty in its ability to restore profitability to levels commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with an "A" rating over the near-term. As a result of recent poor performance, Trenwick's ability to service its fixed obligations has been further weakened. Moreover, the financial leverage of the group, as measured by debt-plus-preferred to total adjusted capital has risen to 35% due to losses reported in the second quarter. This will continue to place pressure on the capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. levels at the operating companies operating company A business that engages in transactions with outsiders. and potentially restrict capital formation due to the parent's dependence on dividends to service debt obligations. These ratings will remain under review pending further due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. by A.M. Best on the group's loss reserve position and discussions with management regarding its operating and capital strategies. The following ratings have been placed under review with negative implications: Trenwick Group A (Excellent) financial strength rating Trenwick Group Ltd. "bbb" indicative senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. rating "bbb-" indicative subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". rating "bb+" indicative preferred securities rating "bb+" indicative 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. rating Trenwick America Corporation (guaranteed by Trenwick Group Ltd.) "bbb" rating on $75 million 6.7% senior notes, due 2003 Trenwick America Capital Trust I "bb+" rating on $110 million 8.82% subordinated capital securities, due 2037 Trenwick America Capital Trust II and III "bb+" indicative preferred securities rating LaSalle Re Holdings Ltd. "bb+" rating on $75 million Series A preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. 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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