A.M. Best Maintains Under Review Status on Ratings of Certain OneBeacon Insurance Group Ltd. Indirect Subsidiaries
OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has maintained the under review with negative implications status on the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of certain indirect subsidiaries of OneBeacon Insurance Group, Ltd. (OneBeacon Group) (Bermuda) [NYSE:OB]. Additionally, A.M. Best has maintained the under review with negative implications status on the FSR of B++ (Good) and ICR of “bbb+” of Potomac Insurance Company (Potomac) (Philadelphia, PA). The ratings on the remaining indirect subsidiaries of OneBeacon Group as well as all debt ratings of OneBeacon Group, OneBeacon U.S. Holdings, Inc. and OneBeacon U.S. Holdings Trust I, II and III are unchanged. (See below for a detailed list of the companies and ratings.)
The ratings were initially placed under review on October 19, 2012, following the announcement of a definitive agreement under which the One Beacon Group would sell several of its subsidiaries to Armour Group Holdings Limited. The transaction is subject to approval by the Pennsylvania Department of Insurance, which is continuing its evaluation. The ratings will remain under review until the close of the transaction and the completion of A.M. Best’s analysis of its impact on the companies’ ratings. The transaction is expected to close in mid-2014.
The under review with negative implications status has been maintained for the FSR of A (Excellent) and the ICRs of “a” for the following indirect subsidiaries (which support the run-off business) of OneBeacon Insurance Group, Ltd.:
- OneBeacon Insurance Company
- OneBeacon America Insurance Company
- The Employers’ Fire Insurance Company
The FSR of A (Excellent) and ICRs of “a” are unchanged for the following indirect subsidiaries (which support the ongoing operations) of OneBeacon Insurance Group, Ltd.:
- Atlantic Specialty Insurance Company
- Homeland Insurance Company of New York
- Homeland Insurance Company of Delaware
- OBI National Insurance Company
The following debt rating is unchanged:
OneBeacon U.S. Holdings, Inc.—
-- “bbb” on $275 million 4.60% senior unsecured notes, due 2022
The following indicative ratings under the shelf registration are unchanged:
OneBeacon U.S. Holdings, Inc. and OneBeacon Insurance Group, Ltd.—
-- “bbb” on senior unsecured debt
-- “bbb-” on subordinate debt
-- “bb+” on preferred stock
OneBeacon U.S. Holdings Trust I, II, III—
-- “bb+” on preferred stock
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provide a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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