AM Best Comments on Credit Ratings of Caisse Centrale de Réassurance Following Its Announcement of Exclusive Negotiations to Sell Majority Stake in CCR RE

AMSTERDAM--(BUSINESS WIRE)--AM Best has commented that the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa” (Superior) of Caisse Centrale de Réassurance (CCR) (France) remain unchanged following its announcement that it has entered into exclusive negotiations to sell a majority stake in CCR RE, its wholly owned subsidiary. The outlook of the FSR is stable, while the outlook of the Long-Term ICR is negative.

On 8 February 2023, CCR’s board announced that it has entered into exclusive negotiations with Societe Mutuelle d’Assurance du Batiment et des Travaux Publics (SMA-BTP) and MACSF to sell a majority stake in CCR RE.

Under the proposed transaction, CCR will sell approximately 70% of its interest in CCR RE. Following the close of the transaction, SMA-BTP and MACSF are expected to contribute an additional EUR 200 million to CCR RE’s capital base, reducing CCR’s stake in the company to approximately 25%. SMA-BTP is expected to be CCR RE’s majority shareholder when the transaction is completed. The transaction is expected to close by the end of the first half of 2023 and is subject to regulatory approvals and workers council consultations. The proposed transaction includes further mechanisms for SMA-BTP and MACSF to acquire CCR’s remaining interest in CCR RE in 2026.

The current ratings of CCR reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, favourable business profile and appropriate enterprise risk management. These ratings also consider, in the form of rating lift, the explicit unlimited guarantee provided by the Republic of France to CCR’s state-backed business.

The negative outlook of CCR’s Long-Term ICR reflects deterioration in the creditworthiness of the Republic of France, from which CCR receives rating lift.

AM Best will continue to monitor the situation as new developments emerge and review any impact these might have to CCR’s credit rating fundamentals.

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