AMSTERDAM--(BUSINESS WIRE)--AM Best has placed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “bbb+” of TM hf. (TM) (Iceland) under review with developing implications.
The Credit Rating action follows TM’s shareholders’ approval to execute the planned acquisition of Lykill fjármögnun hf. (Lykill), an Icelandic lending and financing company. The proposed acquisition has been approved by Iceland’s Competition Authority, with the final approval from the Icelandic Financial Supervisory Authority (FME) outstanding. The company successfully concluded a share capital offering with aggregated proceeds of ISK 3 billion on 17 December 2019, which were exclusively allocated to holders of pre-emptive rights. The issued capital is intended to be used as part of the purchase price of ISK 9.25 billion for Lykill. TM expects to finalise the transaction by year-end 2019 and fully consolidate Lykill as of 1 January 2020.
The under review with developing implications status reflects the complex nature of the transaction, with potential financial and operational benefits and disadvantages. The ratings will remain under review pending AM Best’s evaluation of the transaction on the rating fundamentals and prospective structure of the group.
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