Fitch Rates RenRe Subsidiary's Senior Notes 'A-'

CHICAGO--()--Fitch Ratings has assigned an 'A-' rating to the $300 million 3.7% senior unsecured notes due April 1, 2025 issued by RenaissanceRe Finance Inc. (RenRe Finance). RenRe Finance is a wholly owned subsidiary of RenaissanceRe Holdings Ltd. (RNR), and RNR has fully and unconditionally guaranteed the notes on a senior unsecured basis. A full list of Fitch's existing ratings on RNR and its subsidiaries, which were not affected by today's action, follows at the end of this release.

KEY RATING DRIVERS

The company expects to use the net proceeds from the offering to repay a $300 million term loan that was put in place to finance a portion of the cash consideration for the acquisition of Platinum Underwriters Holdings, Ltd. (PTP), which closed on March 2, 2015. On March 17, 2015, RenRe Finance became the direct and indirect owner of the equity interests of entities comprising PTP's U.S. insurance operations.

Pro forma for the debt issuance and purchase of PTP ($250 million added existing PTP debt; $762 million of RNR shares issued for PTP purchase), financial leverage increases to 15.9% from 7.6% at Dec. 31, 2014, but is still considered reasonable by Fitch. Fixed-charge coverage (FCC) was a very favorable 16.8x in 2014 due to strong earnings and reduced interest expense and preferred dividends with a debt repayment and preference share refinancing in 2013. Following the debt issuance and purchase of PTP, pro forma FCC declines to approximately 12.5x in 2014, which Fitch still views as very strong.

RATING SENSITIVITIES

Key rating triggers that could lead to a downgrade include failure to successfully integrate PTP, and deterioration in market conditions that impair RNR's leading position in the property catastrophe reinsurance market and result in a weakening of RNR's historically strong profitability. These could be demonstrated by sustained combined ratios above 80% and returns on common equity below 13%, material weakening in the company's current balance sheet strength, as measured by net premiums written-to-shareholders' equity above 0.5x or equity-credit adjusted financial leverage above 25%, or a catastrophe event loss that is 25% or more of shareholders' equity.

Key rating triggers that could lead to an upgrade over the long term include continued favorable underwriting results relative to other property catastrophe reinsurers and comparably rated property/casualty (re)insurer peers, improvement in RNR's competitive position in profitable market segments outside of property catastrophe reinsurance, including its specialty reinsurance and Lloyd's business, and material risk-adjusted capital growth.

Fitch has assigned the following rating:

RenaissanceRe Finance Inc.

--$300 million 3.7% senior notes due 2025 'A-'.

Fitch currently rates RNR and its subsidiaries as follows:

RenaissanceRe Holdings Ltd.

--Issuer Default Rating 'A';

--$125 million 6.08% series C preferred stock 'BBB';

--$275 million 5.375% series E preference shares a 'BBB'.

RenRe North America Holdings, Inc.

--$250 million 5.75% senior notes due 2020 'A-'.

Renaissance Reinsurance Ltd.

--Insurer Financial Strength 'A+'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Insurance Rating Methodology' (Sept. 2014).

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=756650

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=981793

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Contacts

Fitch Ratings
Primary Analyst
Brian C. Schneider, CPA, CPCU, ARe
Senior Director
+1-312-606-2321
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Christopher A. Grimes, CFA
Director
+1-312-368-3263
or
Committee Chairperson
Julie A. Burke, CPA, CFA
Managing Director
+1-312-368-3158
or
Media Relations:
Alyssa Castelli, New York, +1 212-908-0540
Email: alyssa.castelli@fitchratings.com
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Brian C. Schneider, CPA, CPCU, ARe
Senior Director
+1-312-606-2321
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Christopher A. Grimes, CFA
Director
+1-312-368-3263
or
Committee Chairperson
Julie A. Burke, CPA, CFA
Managing Director
+1-312-368-3158
or
Media Relations:
Alyssa Castelli, New York, +1 212-908-0540
Email: alyssa.castelli@fitchratings.com
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com