Best Downgrades Paris-Based SCOR
NU Online News Service, Sept. 11, 4:04 p.m. EDT?Insurance rating service, A.M. Best Co. said it has downgraded the financial strength and debt rating of Paris-based insurer SCOR.
The Oldwick, N.J.-based Best said it downgraded the carrier's financial strength rating from "A-minus" (Excellent) to "B-double-plus" (Very Good), along with its subsidiaries.
Best also downgraded the ratings on debt instruments issued or guaranteed by SCOR.The company's five-year convertible bonds and senior unsecured Euro medium term note program went to "triple-B" from "A-minus."
Its ?100 million (Euro) cumulative subordinated notes, due 2020; $100 million (U.S.) subordinated step-up notes, due 2029; and ?50 million subordinated perpetual step-up notes issued by Societe d'Etudes et de Placements Financiers, were downgraded to "triple-B-minus" from "triple-B."
All ratings have been placed under review, Best said. It added that it "anticipates being able to resolve the under review status" by the end of the year.
The action followed the deterioration in SCOR's risk-adjusted capitalization due to slower than anticipated improvement in performance, said Best.
Best added that plans to make capital in a new life subsidiary available to investors and the sale of Commercial Risks Partners Ltd. in Bermuda, are "highly likely to result in enhancements" to the company's capitalization.
"The company's performance in the first half of 2003 has continued to be affected by adverse development in its reserves for business written prior to 2001 by SCOR Reinsurance Company in the United States and losses arising in its credit derivatives portfolio and from CRP," Best said in a statement. "A.M. Best believes that these factors may continue to depress SCOR's future performance."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.