A.M. Best Removes Odyssey Re From Under Review and Assigns a Stable Outlook.OLDWICK, N.J. -- A.M. Best Co. has removed from under review with negative implications and affirmed the financial strength rating (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 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 Odyssey Re Holdings Corp.'s (Odyssey Re Holdings) (NYSE NYSE See: New York Stock Exchange : ORH ORH Worcester (Airport) ORH Operation Restore Hope ORH Worcester, MA, USA - Worcester /James D O'Brien Field (Airport Code) ) (New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , NY) 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. and insurance subsidiaries, which comprise the Odyssey Reinsurance Group (Odyssey Re). These ratings apply to Odyssey America Reinsurance Corporation (Connecticut), Clearwater Insurance Company and Hudson Insurance Company (both of Delaware) and Hudson Specialty Insurance Company (New York), a reinsured affiliate. Concurrently, A.M. Best has affirmed the ICRs and debt ratings of "bbb" on the senior unsecured securities of Odyssey Re as well as all indicative ratings under a $400 million shelf registration. In addition A.M. Best has assigned a "bb+" rating to each of the Series A and B non-cumulative perpetual 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. totaling $100 million recently issued by Odyssey Re Holdings. All ratings have been assigned a stable outlook. These rating actions follow the completion of a full review of the company's financial position following a scheduled annual management meeting. The review included an assessment of the recent losses suffered from Hurricanes Katrina and Rita and the strengthening of risk adjusted capitalization by the issuance of common stock and perpetual non-cumulative preferred stock offerings by Odyssey Re Holdings. The affirmations reflect Odyssey Re's prudent level of risk-adjusted capitalization, good 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. performance, sustained earnings momentum and its respected market presence and position in the global broker reinsurance market. These attributes are supported by Odyssey Re's diversified geographic client base, combined with its large line capacity, broad product capability and an opportunistic business philosophy. An astute investment management philosophy emphasizing a total return strategy and conservative financial leverage further support these positive rating attributes. The ratings also recognize Odyssey Re's financial flexibility, including its ability to access the debt and equity markets despite its restricted public float of common shares due to its 80% ownership by Fairfax Financial Holdings Fairfax Financial Holdings Limited TSX: FFH.SV NYSE: FFH is a Toronto, Ontario based financial services holding company which, through its subsidiaries, is engaged in property, casualty and life insurance and reinsurance, investment management and insurance claims . Odyssey Re has historically maintained financial leverage--as measured by debt plus preferred securities to capital--at under 25%, supported by historical fixed charge coverage in the mid-single digit, each within the tolerance levels of its rating category. These positive rating factors are tempered by the potential for continued adverse reserve development emerging from its older long-tail casualty reserves, in line with industry trends, although the expectation is that development will continue to decline over time as the liabilities continue to season. Further, exposure to natural catastrophic events as well as dependence on realized capital gains over time remain factors which add potential volatility to the earnings stream. The assignment of a stable outlook indicates that A.M. Best expects Odyssey Re to maintain risk-adjusted capitalization at superior levels supported by profitable underwriting and operating performance, strong reserve adequacy and good financial flexibility. The following preferred stock ratings have been assigned with a stable outlook: Odyssey Re Holdings Corp-- --"bb+" on $50 million of series A perpetual non-cumulative preferred stock --"bb+" on $50 million of series B perpetual non-cumulative preferred stock The FSR of A (Excellent) and ICRs of "a" have been removed from under review with negative implications and affirmed with a stable outlook for the following members of Odyssey Reinsurance Group: --Odyssey America Reinsurance Corporation --Clearwater Insurance Company --Hudson Insurance Company --Hudson Specialty Insurance Company The ICR of "bbb" for Odyssey Re Holdings Corp. has been removed from under review with negative implications and affirmed with a stable outlook. The following debt ratings have been removed from under review with negative implications and affirmed with a stable outlook: Odyssey Re Holdings Corp.-- --"bbb" on $225 million 7.65% unsecured senior notes, due 2013 --"bbb" on $125 million 6.875% unsecured senior notes, due 2015 --"bbb" on $110 million 4.375% convertible senior debentures, due 2022 The following indicative debt ratings available under a $400 million shelf registration have been removed from under review with negative implications and affirmed with a stable outlook: Odyssey Re Holdings Corp.-- --"bbb" on senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. --"bbb-" on 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". --"bb+" on 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. For Best's Debt Ratings, all other Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , 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. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion