S&P Lowers Westbridge Capital Corp. Rtgs;Outlk to Dev.NEW YORK--(BUSINESS WIRE)--S&P CreditWire 11/3/97--Standard & Poor's today lowered the counterparty credit rating of Westbridge Capital Corp. (WBC WBC white blood cell; see leukocyte. WBC abbr. white blood cell WBC, n stands for white blood cell. ) to double-'C' from single-'B' and the company's 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". rating to double-'C' from triple-'C'-plus. The outlook also has been changed to "developing" from negative. Developing implications means the rating could be raised or lowered. About $70 million of rated debt is outstanding. The rating action reflects WBC's third-quarter net loss of approximately $20 million and the expectation of continued operating losses over the next six months. The company continues to experience higher-than-expected claims expense on its core health insurance product lines, as well as inadequate pricing on many of its products. Moreover, WBC will have to infuse in·fuse v. 1. To steep or soak without boiling in order to extract soluble elements or active principles. 2. To introduce a solution into the body through a vein for therapeutic purposes. significant capital into its operating subsidiaries for those entities to fulfill regulatory requirements at year-end 1997, and additional capital contributions will be required in 1998 to the extent that losses continue or increase. The company stated that any failure to provide sufficient capital to its insurance subsidiaries could result in regulatory action, and that the technical default relating to its 11 percent senior subordinated notes is continuing. The company also announced that it has engaged in preliminary discussions for the sale of its operating subsidiaries in an effort to obtain additional capital. WBC, through its insurance subsidiaries National Foundation Life Insurance Co., National Financial Insurance Co., American Insurance Co. of Texas, and Freedom Life Insurance Co. of America, underwrites medical expense and supplemental health insurance products. The insurer also distributes HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, , PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there , and Medicare Select products underwritten by HMOs and other managed care organizations. OUTLOOK: DEVELOPING A further reduction in cash flow and earnings over the near-term could lead to regulatory action, which in turn could result in default. However, if management is successful in obtaining a purchaser or additional capital for its insurance units, there could be an upward rating revision. CONTACT: Jeffrey M Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. , 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 , 212/208-1903 For more information on criteria or subscriptions: http://www.ratings.standardpoor.com |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion