OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has removed from under review with negative implications and downgraded the financial strength rating to B+ (Good) from B++ (Good) and the issuer credit rating to “bbb-” from “bbb” of BTG Pactual Resseguradora S.A. (BTG Pactual Re) (Brazil). The outlook assigned to each rating is negative.
The rating actions follow events related to the ongoing investigation of the former chairman and CEO of BTG Pactual Re’s parent, Banco BTG Pactual S.A. (BTG Pactual Group), and the subsequent deterioration of the BTG Pactual Group’s credit profile. Despite the impact from the decline in the parent’s credit profile, A.M. Best believes that BTG Pactual Re maintains solid stand-alone attributes in terms of operating performance and risk-adjusted capitalization. However, the negative outlook reflects A.M. Best’s concern about the potential impact of its parent’s financial position on BTG Pactual Re’s operations and its ability to source quality business in the medium to long term. This concern is compounded by the ongoing challenging economic and political environment in Brazil.
A key driver that may lead to a positive action for BTG Pactual Re is an improvement of its parent company’s credit profile. Negative rating factors include further deterioration of the parent’s credit profile or liquidity position, or a decline in risk-adjusted capitalization or operating performance of BTG Pactual Re.
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.
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