No Ratings Change for Syndicate 2010 from Lancashire Acquisition Says Best

August 9, 2013

A.M. Best Europe – Rating Services Limited has commented that the financial strength rating of ‘A’ (Excellent) and issuer credit rating (ICR) of “a+” of Lloyd’s Syndicate 2010, “remains unchanged” after the announcement that Bermuda-based Lancashire Holdings Limited has entered into conditional agreements to acquire the entire issued and to be issued share capital of Cathedral Capital Limited, a privately owned Lloyd’s insurer, along with loan notes issued by Cathedral’s subsidiary, Cathedral Capital (Investments) Limited.

In a separate announcement Best said that it doesn’t anticipate any changes in its ratings of Lancashire Holdings following the announcement.

“Cathedral owns both Cathedral Underwriting Limited, which is the managing agent for Lloyd’s Syndicate 2010 and Cathedral Capital (1998) Limited, a Lloyd’s corporate member that provides a share of syndicate 2010’s capital,” Best explained. “The remaining capacity is provided by traditional Lloyd’s names. The ratings of syndicate 2010 are underpinned by the financial strength of the Lloyd’s market and are unaffected by the acquisition.”

However, Best did announce that it has “placed under review with negative implications the ICR of “bbb+” of Cathedral Capital Holdings Limited and the debt ratings of “bbb” on its US$ 10 million and €12 million [$16 million] floating rate subordinated notes both due 2034, as well as both tranches of the US$25 million floating rate subordinated notes, due 2035.”

Best said these “ratings will remain under review pending the completion of the transaction and Best’s analysis of the future structure of the enlarged group.”

Source: A.M. Best

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