Best Assigns ‘bbb’ Indicative Rating to R&SA Notes

July 9, 2004

A.M. Best Co. announced that it has assigned an indicative rating of “bbb” to the forthcoming perpetual subordinated notes to be issued by the U.K.’s Royal & Sun Alliance Insurance Group plc., guaranteed by Royal & Sun Alliance Insurance plc.

“Under the terms and conditions of the issue, R&SA will have the option to repay the loan amount after 10 years,” Best noted. “The proposed issue will be treated as hybrid capital in accordance with A.M. Best’s Debt Rating Methodology, subject to an aggregate equity credit limit for hybrid equities of 20% of total adjusted capital. The outlook on the rating is negative, which is in line with R&SA’s financial strength rating—currently rated ‘A-‘ (Excellent) with a negative outlook. “

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