A.M. Best Rates RenaissanceRe's $500 Million Shelf Registration of Mixed Securities.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 27, 2002 A.M. Best Co. has extended indicative ratings of "a" to senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. , "a-" to 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". and "bbb" to 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. for RenaissanceRe Holdings Ltd.'s (NYSE NYSE See: New York Stock Exchange : RNR RNR Rock 'N Roll RNR Royal Naval Reserve RNR Ribonucleotide Reductase RNR Receive Not Ready (ITU-T; ISDN) RNR Research News Reporter RNR Rest and Relaxation RNR Registry of Nursing Research RNR Rest and Recreation ), Bermuda, recently filed $500 million shelf registration. This increases availability under shelf registration to $564.3 million. Also, A.M. Best has assigned an indicative rating of "bbb+" to RenaissanceRe Capital Trust's trust preferred securities, which is part of the same registration. The existing debt ratings are affirmed, while the financial strength ratings assigned to the group's operating companies remain unaffected. The net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the sale of any of these securities may be used by RenaissanceRe for general corporate purposes to provide working capital and to support capital expenditures and potential acquisitions. As of December 2001, RenaissanceRe's financial leverage--debt as a percent of total adjusted capital--was 12.4%, and its 2001 financial performance resulted in a fixed charge coverage of 12 times. A.M. Best expects that as the company issues any of the securities provided for in this shelf registration, it will manage the financial leverage to a range no greater than the low to mid 20% level while maintaining common equity of at least 65% of total capital and continuing to achieve a fixed charge coverage in the mid single digit range or higher. A.M. Best's ratings reflect RenaissanceRe's consistently strong earnings trends, superior risk management capabilities, experienced management team, strong capital position and its recognized leadership position in the worldwide property catastrophe 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. market. RenaissanceRe's recent earnings release reflected operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $164 million in 2001 despite a $48 million charge related to the September 11 attacks September 11 attacks Series of airline hijackings and suicide bombings against U.S. targets perpetrated by 19 militants associated with the Islamic extremist group al-Qaeda. . Additionally, through operating income and the issuance of common and preferred securities, RenaissanceRe increased its total capital by 63% in 2001. As such, A.M. Best believes the company--which has forecasted a return on equity of greater than 20% for 2002--is well positioned to take advantage of the significant rate hardening in the reinsurance marketplace and will continue to generate superior operating results relative to its peers. RenaissanceRe Holdings Ltd., is a holding company, which through Renaissance Reinsurance Ltd., operates as a 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. on a worldwide basis. As of December 2001, the holding company reported assets of $2.2 billion and shareholders' equity of $1.2 billion. The following indicative ratings are extended to debt securities available under shelf registration: -- RenaissanceRe Holdings Ltd.-- "a" rating on $150 million 7.00% senior unsecured notes, due 2008 "bbb" rating on $150 million 8.10% Series A preferred shares -- RenaissanceRe Capital Trust -- "bbb+" rating on 8.54% Guaranteed Preferred Trust Securities, due 2027 The following debt ratings are affirmed: -- RenaissanceRe Holdings Ltd.-- "a" rating on $150 million 7.00% senior unsecured notes, due 2008 "bbb" rating on $150 million 8.10% Series A preferred shares -- RenaissanceRe Capital Trust -- "bbb+" rating on 8.54% Guaranteed Preferred Trust Securities, due 2027 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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