A.M. Best Removes Ratings of Validus Holdings, Ltd. and Its Affiliates From Under Review.OLDWICK, N.J. -- A.M. Best Co. has removed from under review with negative implications and affirmed the financial strength ratings 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 Validus 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. , Ltd. (Validus) (Bermuda) as well as IPCRe Limited (Bermuda) and IPCRe Europe Limited (Dublin, Ireland) (collectively known as IPCRe) . A.M. Best also has removed from under review with negative implications and affirmed the ICR of "bbb-" and the indicative ratings for securities available under the shelf registration of "bbb-" on senior debt, "bb+" 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". and "bb" on the 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. of Validus Holdings Ltd (Validus Holdings) (Bermuda) [NYSE NYSE See: New York Stock Exchange :VR] The outlook assigned to the above ratings is stable. Concurrently, A.M. Best has withdrawn the ICR of "bbb-" and the indicative ratings of "bb+" on preferred stock, "bbb" on senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. and "bbb-" on subordinated debt for securities available under the former shelf registration of IPC (1) (InterProcess Communication) The exchange of data between one program and another either within the same computer or over a network. It implies a protocol that guarantees a response to a request. Holdings Ltd. (IPCRe Holdings) as these ratings have been merged out of existence. On September 4, 2009, Validus Holdings completed the acquisition of IPCRe Holdings in exchange for a .9727 common voting share of Validus Holdings for each IPCRe common share and cash consideration of $7.50 per share. This effectively put IPCRe into run off as all renewal business going forward will be written by Validus. Management has indicated its intention to move capital from IPCRe to Validus 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 the movement of risk as business renews. A.M. Best will closely monitor this process to ensure capital is kept at levels that support the current ratings. The ratings contemplate the prospective benefits that will be realized through the acquisition due to the larger capital base and market profile. However, it will take time to truly gauge these prospective benefits' impact on the Validus franchise. Partially offsetting these strengths is Validus' susceptibility to low frequency, high severity events as a property catastrophe focused 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. and the increased uncertainty over the short term due to the business that was previously underwritten by IPCRe. The stable outlook reflects the expectation that operating performance and risk-adjusted capitalization will continue to remain supportive of the current rating levels. For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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