A.M. Best Co. announced that it has assigned a debt rating of “bbb” to Bermuda-based PartnerRe Ltd.’s $200 million 6.5 percent Series D Cumulative Redeemable Preferred Shares. It also assigned PartnerRe an issuer credit rating of “a-” and noted that the “financial strength rating of “A+” (Superior) and all debt and operating company issuer credit ratings of PartnerRe Group (Hamilton, Bermuda), and its affiliated companies are unaffected. All ratings have a stable outlook.”
PartnerRe announced the offering on Wednesday (See IJ Website Nov. 10). Standard & Poor’s has assigned the issue its “BBB+” rating (See IJ Website Nov. 11).
After describing the issue, Best said: “The ratings reflect PartnerRe’s prominent position as a leading global multi-line reinsurance organization offering diversified products and international market capabilities. PartnerRe has achieved solid consolidated operating returns through its client-oriented strategy, specialized underwriting expertise, diverse risk portfolio and conservative reserving practices. PartnerRe’s superior capitalization and prominent market position enable it to access capital markets. Through the nine months ended September 30, 2004, PartnerRe produced a combined ratio of 94.2 percent. For the three months ended September 30, 2004, PartnerRe’s combined ratio was 99.5 percent, which include 16 percent for losses emanating from the third quarter’s extraordinarily active hurricane season.
“Partially offsetting these positive rating factors are PartnerRe’s exposure to adverse loss development for U.S. casualty lines of business written from 1997 to 2001; however, this exposure remains relatively small in relation to PartnerRe’s consolidated loss reserve position. Furthermore, PartnerRe’s earnings continue to be susceptible to catastrophe exposure, which combined with its modest use of retrocessional agreements, can subject PartnerRe to a higher degree of year-over-year earnings variability.”
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