A.M. Best Rates RenaissanceRe Holdings $200m Shelf Registration.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--May 9, 2001 A.M. Best Co. has assigned indicative ratings of "a" senior debt, "a-" 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". , "bbb+" preferred securities and "bbb" 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. to RenaissanceRe Holdings Ltd. (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 ) on its recently filed $200 million shelf registration. A.M. Best Co. has also affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the "bbb+" rating of the company's existing trust preferred securities. The financial strength rating of "A+" (Superior) on the group's 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. subsidiaries remains unchanged. The shelf registration statement provides for the issuance of up to $200 million in any combination of senior or subordinated notes, trust preferred securities, preference shares or common stock as well as warrants and share purchase contracts or units. A.M. Best expects total borrowings--debt plus preferred securities, as a percent of total capital--not to exceed 35% and fixed charge coverage to remain strong. The ratings reflect Renaissance Re's consistently strong earnings trends, superior risk management capabilities, conservative balance sheet strategies, and recognized leadership position in the worldwide property catastrophe reinsurance market. These positive rating factors are derived from the company's experienced management team, highly disciplined underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. focus, and strong risk evaluation capabilities, supported by a proprietary pricing and exposure management system. The company's extensive catastrophe management capabilities are demonstrated by its consistently superior results relative to its peers despite the high frequency and severity of catastrophic events in recent years. These factors have provided strong growth to the company's equity base while at the same time enabling it to fund opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. and service debt requirements. The company has historically maintained a conservative level of financial leverage. Cash coverage of debt obligations has been consistently high, stemming from sustained profitability. A.M. Best expects the company to prudently manage its capitalization and maintain fixed charge coverage at superior levels. Offsetting these strengths are the competitive pricing pressures experienced in the property catastrophe reinsurance market, a condition that is expected to continue, although at a less intense level. The company's lack of product line diversification and emphasis on property catastrophe reinsurance exposures amplify this condition, presenting additional risk to surplus that could result from a severe industry event. Mitigating these risks are the company's globally diversified exposure base, which reduces operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. as well as its strategic partnerships. A.M. Best believes the company is well positioned to sustain a superior level of financial performance relative to its peers and expects it to continue to generate solid operating returns due to its demonstrated risk management expertise and conservative underwriting criteria. RenaissanceRe Holdings Ltd. is a Bermuda-based 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. At March 31, 2001, the holding company reported assets of $1.7 billion and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $747 million. The following debt ratings were assigned to the shelf registration: RenaissanceRe Holdings Ltd. - Senior debt rating of "a" - Subordinated debt rating of "a-" - Preferred stock rating of "bbb" RenaissanceRe Capital Trust II - Trust Preferred rating of "bbb+" The following rating on existing debt was affirmed: RenaissanceRe Capital Trust - "bbb+" rating on the 8.54% Guaranteed Preferred Trust Securities, due 2027 The financial strength ratings of the following members of RenaissanceRe Holdings Ltd. remain unchanged: - A+ (Superior) rating of Renaissance Reinsurance Ltd., Bermuda - A+ (Superior) rating of Renaissance Reinsurance of Europe, Ireland - A- (Excellent) rating of Glencoe Insurance Ltd. - B+ (Very Good) rating of Nobel Insurance Company 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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