A.M. Best Co. has downgraded the financial strength ratings to A-
(Excellent) from A (Excellent) and issuer credit ratings to “a-” from
“a” of IPCRe Limited (Bermuda) and IPCRe Europe Limited
(Dublin, Ireland), which are reinsurance subsidiaries of IPC Holdings
Ltd. (IPC) (Bermuda) (NASDAQ: IPCR). The ratings continue to be
under review with negative implications following the recent
announcement of the definitive agreement between IPC and Validus
Holdings, Ltd (NYSE: VR). A.M. Best also has downgraded IPC’s ICR to
“bbb-” from “bbb” and the indicative ratings for securities available
under shelf registration to “bb” from “bb+” on preferred stock, “bbb-”
from “bbb” on senior unsecured debt and to “bb+” from “bbb-” on
subordinated debt of IPC. These ratings remain under review with
negative implications.
The ratings of IPC were initially assigned a negative outlook in
December 2007 based on concerns regarding the company’s enterprise risk
management and its impact on capital optimization, which could drive
stronger, sustainable long-term results. In order to seek out capital
optimization, the IPC Board of Directors and its management had been
pursuing a merger or acquisition strategy. However, the business profile
of IPC has deteriorated over the last several months, during which time
IPC has been party to a failed transaction and the target of a hostile
take over. If for any reason the current transaction is not completed,
in A.M. Best’s opinion, as a stand-alone entity, IPC’s business profile
is now commensurate with that of an A- (Excellent) rated organization.
The under review status reflects the execution risk associated with the
current pending transaction; therefore, the ratings will remain under
review until the transaction closes and there is a clearer indication of
the future status of IPC’s organizational structure.
For Best’s Credit Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings, including
any additional methodologies and factors that may have been considered,
can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit
rating organization dedicated to serving the financial and health care
service industries, including insurance companies, banks, hospitals and
health care system providers. For more information, visit www.ambest.com.
A.M. Best Co.
Analysts
Greg Reisner,
908-439-2200, ext. 5224
greg.reisner@ambest.com
or
Peter
Dickey, 908-439-2200, ext. 5053
peter.dickey@ambest.com
or
Public
Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle
Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
