MEXICO CITY--(BUSINESS WIRE)--A.M. Best has placed under review with developing implications the Financial Strength Rating of A (Excellent), the Long-Term Issuer Credit Rating of “a+” and the Mexico National Scale Rating of “aaa.MX” of XL Seguros Mexico, S.A. de C.V. (Mexico).
The Credit Rating (rating) actions taken on the Mexican subsidiary follow the announcement of an agreement to purchase XL Group Ltd (XL) [NYSE: XL] by AXA Group on March 5, 2018, for $57.60 per share, for a total consideration value of $15.3 billion. The transaction represents a 33% premium to XL closing share price on March 2, 2018. This transaction is expected to close in the second half of 2018 and is expected to be financed as an all cash deal. The ratings will remain under review until the deal closes, and A.M. Best completes its evaluation of organizational changes and XL’s strategic position within the new structure. A positive rating outcome could occur depending on the levels of implicit and explicit support provided to XL and its subsidiaries after the close of the transaction. However, if the transaction is unsuccessful there could be negative rating pressure on XL if operational issues emerge. The under review status may be updated in the interim period if new facts and circumstances present themselves.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides 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.
Key insurance criteria reports utilized:
- Catastrophe Analysis in A.M. Best Ratings (Version Oct. 13, 2017)
- Evaluating Country Risk (Version Oct. 13, 2017)
- Understanding Universal BCAR (Version Oct. 13, 2017)
- Available Capital & Holding Company Analysis (Version Oct. 13, 2017)
- A.M. Best's Ratings On a National Scale (Version Oct. 13, 2017)
View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Understanding Best’s Credit Ratings.
- Previous Rating Date: Aug. 11, 2017
- Date of Financial Data Used: Sept. 30, 2017
This press release relates to rating(s) that have been published on A.M. Best's website. For additional 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.
A.M. Best does not validate or certify the information provided by the client in order to issue a credit rating.
While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. A.M. Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, A.M. Best cannot attest as to the accuracy of the information provided.
A.M. Best’s credit ratings are independent and objective opinions, not statements of fact. A.M. Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. A.M. Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.
A.M. Best receives compensation for interactive rating services provided to organizations that it rates. A.M. Best may also receive compensation from rated entities for non-rating related services or products offered by A.M. Best. A.M. Best does not offer consulting or advisory services. For more information regarding A.M. Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the A.M. Best Code of Conduct. 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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.