NRMA Given Rating

September 24, 2001

S&P assigned its “AA+” long-term rating to the guaranteed and unsubordinated series of wholesale notes to be issued under the NZ$300 million medium-term note program of NRMA (NZ) Holdings Ltd. NRMA Insurance Ltd. (NRMA, rated “AA+” for insurer financial strength) guarantees the unsubordinated and guaranteed obligations that will be issued under the program.

The program will further assist in the refinancing of a bank facility used in the February 2001 acquisition by NRMA (NZ) Holdings of State Insurance Ltd. (local currency rating “AA-“/Watch Pos/-), the largest general insurer in New Zealand. The overall debt outstanding for insurance purposes in the NRMA group is expected to remain within the tolerance of S&P’s guidelines. Added debt currently funding building society operations, however, is expected to reduce in line with the anticipated sale of those operations.

The “AA+” ratings on the guarantor reflect NRMA’s excellent business position, with clear market leadership in general insurance in Australia, its associated benefits of economics of scale and expense advantage, along with extremely strong capital position and soundly and conservatively based claims reserves. Its operating performance, while having recently improved, has not historically been supportive of the rating.

The outlook on NRMA is negative, reflecting the potential for further deterioration in capitalization in the medium term as part of the group’s capital management strategy to maximize returns and fund its growth targets.

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