S&P Expects To Assgn 'A-' Rtg to Zurich Re (London).LONDON--(BUSINESS WIRE)--S&P's CreditWire 9/3/98--Standard & Poor's today announced that it expects to assign its single-'A'-minus long-term financial strength and counterparty credit ratings to Zurich 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. (London) Ltd. (ZRL ZRL Zurich Research Laboratory ZRL Zero Risk Level ). The rating is contingent upon the final financing terms and conditions of the buyout agreement with the present owners of the company, the Zurich Insurance Group. The final rating could be lower if the financing terms deviate significantly from the ones presented to Standard & Poor's. The conditional rating conditional rating See provisional rating. was provided under Standard & Poor's new 'Rating Evaluation Service' (RES), and is based on: -- ZRL's strong, profit focused management team; -- Very strong capitalization; -- Good and improving operating performance; -- Lack of any pre-1990 exposures; and -- Excellent client relationships. Offsetting factors are the uncertainty surrounding the operational impact of the management buyout Management buyout (MBO) Leveraged buyout whereby the acquiring group is led by the firm's management. management buyout See going private. (MBO MBO See: Management buyout ), volatile long-tail nature of the business, and sizable potential Year 2000 exposures, which the company has been addressing vigorously since 1996. Standard & Poor's has assessed the impact that the MBO would have on the company's financial profile and determined that the preliminary structure of the deal is consistent with the conditional rating. Upon completion of the deal, a definitive rating would be assigned. During the past year, Standard & Poor's has worked with a number of insurance companies to provide a conditional financial strength rating on the effects of a single proposal or a defined group of proposals. The 'Rating Evaluation Service' is utilized by companies considering mergers, acquisitions, asset disposals/demergers, equity repurchases, privatizations, recapitalizations, debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: , and, of course, MBO's and Initial Public Offerings, Standard and Poor's Noun 1. Standard and Poor's - a broadly based stock market index Standard and Poor's Index said.--CreditWire.
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