A.M. Best Co. has assigned a rating of “bbb” to the $30 million floating rate subordinated bonds, issued by the U.K.-based Kiln plc with a stable outlook.
Best noted: “The proceeds of this issue will be used to increase Kiln’s participation on Lloyd’s Syndicate 510 and to fund the Kiln group’s increased funds at Lloyd’s (FAL) requirements for the 2007 year of account when the syndicate’s capacity is expected to increase by 17.6 percent to £735 million ($1.374 billion).”
The rating agency also noted that Kiln’s “financial and debt leverage ratios remain within A.M. Best tolerance levels. The bonds carry the three-month LIBOR US deposit interest rate plus 3.1 percent. They have a 30-year duration with a five-year call option held by the issuer. The proceeds have some equity characteristics for which A.M. Best will give partial credit in its quantitative analysis of Kiln.”