DUFF & PHELPS: ORION CAPITAL CORPORATION SENIOR DEBT RATING UPGRADED TO 'BBB'
CHICAGO, Oct. 1 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has upgraded the senior debt rating of Orion Capital Corporation (Orion Capital) from 'BBB-' (Triple-B-Minus) to 'BBB' (Triple-B). This rating action reflects the reduction in Orion Capital's financial leverage and continued favorable operating results. Orion Capital is an insurance holding company, whose six insurance subsidiaries constitute one of the 75 largest property and casualty groups in the United States. In addition, Orion Capital owns 49.3 percent of the Guaranty National Corporation, a property and casualty insurance company which writes non-standard commercial and personal auto insurance. This rating action affects $110 million in debt. The 'A+' (Single-A-Plus) claims paying ability rating of the Orion Capital Intercompany Pool has been reaffirmed. During 1992 and continuing through the first half of 1993, Orion Capital has gone through a process of simplifying its capital structure. The company redeemed all of its outstanding debentures and its adjustable rate preferred stock, and converted two issues of convertible exchangeable preferred stock into common stock. In place of the outstanding debentures and adjustable rate preferred stock the company issued $110 of senior notes and negotiated a new bank facility. As a result of this simplification and continued favorable operating earnings, the company was able to reduced its debt to 31.7 percent of total capitalization at the end of the second quarter of 1993, with no preferred stock outstanding. Debt and preferred stock to total capitalization was 39.0 percent and 54.2 percent at the end of 1992 and 1991, respectively. Earnings (excluding realized capital gains) were 4.0 times fixed charges in the first half of 1993. The combined ratio (GAAP) of Orion Capital's operating subsidiaries was 103.3 percent for the first half of 1993, compared to 105.4 percent in the first half of 1992. The policyholders' surplus of the operating subsidiaries increased to $439.3 million at the end of the second quarter of 1993, up from $385.8 million at yearend 1992. Operating leverage as measured by the ratio of net written premiums to policyholders' surplus was unchanged from yearend at 1.5 to 1. Members of the Orion Capital Companies Intercompany Pool and their share of the pool are as follows: Security Insurance Company of Hartford (65.0 percent), Employee Benefits Insurance Companyp?ercent), Design Professionals Insurance Company (7.5 percent), The Connecticut Indemnity Company (10.0 percent), EBI Indemnity Company (5.0 percent), and The Fire and Casualty Insurance Company of Connecticut (5.0 percent). -0- 10/1/93 /CONTACT: Timothy A. Bienek of Duff & Phelps Credit Rating Co., 312-368-3192/
CO: Orion Capital Corporation ST: Illinois IN: FIN SU: RTG
WB -- NY042 -- 7755 10/01/93 11:33 EDT