Ratings Roundup: Empyrean Re, Storebrand, Ballantyne Re

A.M. Best Co. has affirmed the financial strength rating of ‘A-’ (Excellent) and the issuer credit rating of “a-” of Bermuda-based Empyrean Re Ltd. with a stable outlook. “The ratings are based on the company’s excellent capitalization, experienced management team and sound business plan, “said Best. These strengths are partially offset by the untested start-up nature and the mono-line orientation of the company.”

Standard & Poor’s Ratings Services has assigned its ‘BBB+’ long-term debt rating to the proposed upper Tier 2 notes that Norway-based life and pensions insurer Storebrand Livsforsikring AS (Storebrand Liv, A/Negative/–) plans to issue to raise approximately €300 million ($444.9 million). S&P said the “ratings on the notes are provisional, subject to the receipt of the final issue documentation.” It expects to “classify the new securities as Category 2 (‘strong’) hybrid equity instruments.”

Standard & Poor’s Ratings Services has lowered its senior debt rating on Ballantyne Re plc’s Class A-1 notes to ‘BBB-’ from ‘A-’. The notes will remain on CreditWatch with negative implications, where they were placed on Nov. 21, 2007. “We took these actions in response to the continuing mark-to-market losses experienced on the assets in the underlying collateral accounts,” explained S&P credit analyst Gary Martucci. “Since Nov. 21, mark-to-market losses have increased, putting additional strain on the structure.” Although the Class A-1 notes have continued to receive interest payments, the concern is that the continued decline in the underlying asset values will result in an interest payment limitation trigger being breached.