OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has placed under review with developing implications the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a” of Validus Reinsurance, Ltd. (Validus Re) (Hamilton, Bermuda) and the following subsidiaries of Validus Holdings, Ltd. (Validus) (Hamilton, Bermuda) [NYSE:VR]: Western World Insurance Company, Stratford Insurance Company and Tudor Insurance Company (all headquartered in Parsippany, NJ), and Validus Reinsurance (Switzerland) Ltd. (Zurich, Switzerland).
A.M. Best also has placed under review with developing implications the Long-Term ICR of “bbb” and the Long-Term Issue Credit Ratings (Long-Term IR) of Validus, the ultimate parent company. (See below for a detailed listing of the Long-Term IRs.)
The Credit Rating (rating) action follows the announcement of an agreement to purchase Validus by American International Group, Inc. on Jan. 22, 2018, for $68.00 per share in cash for an aggregate transaction value of $5.56 billion. The transaction represents a 46% premium to Validus’ closing share price on Jan. 19, 2018, and a 39% premium to Validus’ three-month volume weighted average price as of Jan. 19, 2018. This deal is expected to close in mid-2018, with 100% cash consideration paid to Validus common shareholders. The ratings will remain under review until the deal closes and A.M. Best completes its evaluation of organizational changes and strategic position within the new structure. A likely outcome may be that Validus’ and its subsidiaries’ FSR and Long-Term ICRs will be affirmed with the outlook reverting to stable from the current positive outlook. The under-review status may be updated in the interim period if new facts and circumstances present themselves.
The following Long-Term IR has been placed under review with developing implications:
Validus Holdings, Ltd.—
-- “bbb” on $250 million 8.875% senior unsecured notes, due January 2040
The following indicative Long-Term IRs for securities available under the shelf registration have been placed under review with developing implications:
Validus Holdings, Ltd.—
-- “bbb” on senior unsecured debt
-- “bbb-” on subordinated debt
-- “bb+” on preferred stock
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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