Correction: Fitch Rates HCC Insurance Holdings Convertible Senior Notes 'A-'.CHICAGO -- (This is an amended version of a press release issued earlier today, containing revised information on HCC's GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). combined ratio.) Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has assigned an 'A-' rating to the new 2% convertible exchange notes due 2021 issued by HCC Insurance Holdings HCC Insurance Holdings, Inc. , Inc. (HCC HCC Hepatocellular Carcinoma (liver cancer) HCC Hertfordshire County Council (administrative region of south eastern England UK) HCC Harford Community College (Maryland) ) as part of a recently announced exchange offer for its existing $172.4 million outstanding 2% senior convertible notes due April 2021. The rating is equivalent to HCC's current long-term issuer and senior debt rating. The Rating Outlook is Stable. The new notes have the same maturity, coupon rate Coupon rate In bonds, notes, or other fixed income securities, the stated percentage rate of interest, usually paid twice a year. and conversion price as the existing notes. Terms of the new notes defer the date in which HCC can redeem the notes for cash to any date on or after Sept. 1, 2007 from Sept. 1, 2006 previously. Likewise the dates in which noteholders can opt to redeem the notes for cash changes to a first possible date of Sept. 1, 2007 from Sept. 1, 2006. There were also some adjustments to change in control provisions and HCC also has the option to cash rather than stock to holders upon conversion. The ratings continue to be based on HCC's market position in a number of specialty insurance segments, as well as the company's strong capital position at its insurance subsidiaries and at the parent holding company, conservative investment profile, adequate loss reserves, and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. historical 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. The company's operations in insurance underwriting, and fee based insurance intermediary businesses provide significant earnings and cash flow diversity, and a unique approach to managing underwriting risk that has proven successful over an extended period. The company reported GAAP consolidated assets of $5.6 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 approximately $1.2 billion at Sept. 30, 2004. The company's debt to total capital was 21.6% at that date. Led by Houston Casualty Co., HCC's insurance operations focus on several specialty lines, including medical stop loss, aviation, marine, property, directors & officers liability accident & health, surety and professional liability. The company has historically reported very favorable underwriting results. In the first nine months of 2004, HCC's GAAP combined ratio increased to 92.9% from 88.8% in the first nine months of 2003. Net income improved to $106.8 million in the first nine months of 2004 compared with $93.1 million for the same period in 2003.
A[micro] Entity/Issue/Type Action Rating/Outlook
A[micro] HCC Insurance Holdings, Inc.
A[micro] -- $172 million 2% convertible notes due 2021 Assign 'A-'/Stable;
A[micro] -- $172 million 2% convertible notes due 2021 Affirm 'A-'/Stable;
A[micro] -- $125 million 1.3% convertible notes due 2023 Affirm
'A-'/Stable;
A[micro] -- Long-term issuer rating Affirm 'A-'/Stable.
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