S&P Cuts Trenwick Grp Ltd. Rtgs, Kept on Watch Neg.Business Editors NEW YORK--(BUSINESS WIRE)--Oct. 29, 2002 Standard & Poor's Ratings Services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. said today it lowered its counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit and financial strength ratings on members of the Trenwick Group Ltd. by various degrees. Standard & Poor's also said these companies remain on CreditWatch with negative implications, where they were placed on Oct. 21, 2002. "The lowered ratings are the result of Trenwick America 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. Co. (TARCO TARCO Tonal Adaptive Resolution COdec ) no longer writing business on its own paper, the considerable uncertainty about whether its banks will renew letters of credit that allow continued 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. at Lloyds, and by the potential for additional reserve development signaled by the announcement of a fourth-quarter 2002 reserve study," said Standard & Poor's credit analyst Karole Dill Barkley. Standard & Poor's believes that the operating companies operating company A business that engages in transactions with outsiders. may be placed into runoff Runoff The procedure of printing the end-of-day prices for every stock on an exchange onto ticker tape. Notes: If the "tape is late" then it can take a long time to print off all the closing prices. . TARCO no longer writes business on its own paper but rather has entered into an underwriting arrangement with Chubb Re to front renewals of TARCO business on its behalf. This arrangement reflects a significantly reduced business position prospectively, with long-term implications as yet uncertain. The counterparty credit and financial strength ratings on Insurance Corp. of 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 and Dakota Specialty Insurance Co. were lowered to double-'B' from triple-'B'. The counterparty credit and financial strength ratings on Trenwick International Ltd. were lowered to single-'B'-plus from double-'B'-plus and the counterparty credit and financial strength ratings on Chartwell Insurance Co. were lowered to single-'B'-plus from double-'B'. Standard & Poor's believes that certain operating companies may be placed into runoff. The creditors under Trenwick's credit agreement will decide whether to renew and extend their $230 million letters of credit by Nov. 22, 2002. If the banks elect not to renew the letters of credit or to demand cash collateral, there is substantial doubt as to Trenwick's ability to continue underwriting at Lloyds or continue as an ongoing concern. Management has disclosed that Trenwick and/or one or more of its subsidiaries may be forced to seek protection from creditors. Standard & Poor's will continue to monitor developments at Trenwick in the next few weeks, and will review these ratings on the release of third-quarter financial information, following the bank decision whether to extend its letters of credit at Lloyds, following the completion and Standard & Poor's review of a third-party reserve study currently underway for all key operating platforms, and after any other material developments. After the review, Standard & Poor's ratings could be 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. or lowered. A complete list of the ratings is available to RatingsDirect subscribers at www.ratingsdirect.com, as well as on Standard & Poor's public Web site at www.standardandpoors.com under Ratings Actions/Newly Released Ratings. Copyright 2002, Standard & Poor's Ratings Services |
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