Fitch Ratings Affirms St. Paul's 'A-' Senior Debt Rating.Business Editors CHICAGO--(BUSINESS WIRE)--April 25, 2002 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 affirmed its ratings on The St. Paul St. Paul as a missionary he fearlessly confronts the “perils of waters, of robbers, in the city, in the wilderness.” [N.T.: II Cor. 11:26] See : Bravery Companies, Inc. (SPC 1. (business) SPC - Statistical Process Control. Something to do with quality management. 2. (body) SPC - Software Productivity Centre. 3. (company) SPC - Software Publishing Corporation. 4. ). The Rating Outlook is Stable. A list of the ratings being affirmed is in the table below. Fitch's affirmation follows SPC's announcement that it plans to transfer its 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. operations to a newly formed Bermuda-based 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. known as Platinum Underwriters Holdings Ltd. (Platinum). Platinum plans to complete an initial public offering (IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ) within the next three months and raise expected 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). of $940 million. Concurrent with the IPO's completion, SPC will contribute tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. with a book value of $26 million and intangible assets such as broker lists, contract renewal rights, and licenses in exchange for a 24.9% interest in Platinum. Platinum will not assume any of SPC's existing debt as part of this transaction. In addition, upon completion of the IPO, SPC and Platinum will enter into a quota-share reinsurance contract covering SPC's reinsurance contracts with Jan. 1, 2002 and subsequent effective dates. As of April 24, 2002, SPC would have transferred approximately $137 million of reserves and related assets to Platinum under terms of this contract. Fitch views this transaction as a ratings-neutral event where SPC will effectively monetize its investment in a portion of its reinsurance book, place the rest of its reinsurance book into run-off, and depending on Platinum's IPO price, likely recognize a gain on the transaction. Fitch also believes that SPC's reinsurance operation's earnings and cash flows were more volatile than the company's core commercial business and thus absent reserve strengthening on the run-off reinsurance book, Fitch believes SPC's earnings and cash flows will be more stable and predictable going forward. These ratings were initiated by Fitch as a service to users of Fitch ratings. The ratings are based primarily on publicly available information. Entity/Type Action Rating/Outlook The St. Paul Companies, Inc. -- Long-term rating Affirm 'A-'/Stable; -- 7.13% senior notes Due 2005 Affirm 'A-'/Stable; -- 7.88% senior notes Due 2005 Affirm 'A-'/Stable; -- 5.75% Senior Notes Due 2007 Affirm 'A-'/Stable; -- 8.13% Senior Notes Due 2010 Affirm 'A-'/Stable; -- $800MM Commercial paper Affirm 'F2'. St. Paul Capital Trust I -- 7.6% Trust preferred securities Affirm 'BBB+'/Stable. MMI Capital Trust I -- 7.625% Trust preferred sec. Affirm 'BBB+'/Stable. USF&G Capital Trust I -- 8.5% Trust preferred securities Affirm 'BBB+'/Stable. USF&G Capital Trust II -- 8.47% Trust preferred securities Affirm 'BBB+'/Stable. USF&G Capital Trust III -- 8.312% Trust preferred sec. Affirm 'BBB+'/Stable. |
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