A.M. Best Co. announced that it has assigned indicative ratings of “bbb” to senior unsecured debt, “bbb-” to subordinated debt and “bb” to preferred stock for the PXRE Group Ltd.’s recently filed $150 million shelf registration. (See IJ Website May 29)
Best also announced that it has assigned an indicative rating of “bb+” to PXRE Capital Trust IV’s trust preferred securities, which is part of the same registration. “The group’s existing debt and financial strength ratings are not affected by this action. The outlook on all ratings is negative,” said the bulletin.
Best noted that the company “will use the net proceeds from the sale of any of these securities for general corporate purposes, which may include working capital, repurchasing common stock and repayment of debt.” The rating agency indicated it, “expects that as PXRE issues securities under this shelf registration, it will manage its financial leverage–debt plus preferred securities as a percentage of total adjusted capital–to a level no greater than 30% and that its financial performance should provide a fixed charge coverage in the upper single digit range. A.M. Best excludes the company’s convertible preferred shares from these calculations as they are mandatorily convertible to common stock and are being serviced with additional shares of preferred stock.”
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