Berkshire Hathaway Inc. may buy some assets of Reliance Group Holdings Inc., according to a Tuesday report by the Wall Street Journal. The move has left many analysts in a daze of confusion. “I’m not even sure what exactly [Berkshire] would be interested in,” Michael Paisan, an analyst at Keefe, Bruyette & Woods told Reuters news service, “[Reliance] has already sold off their good assets. What’s left is not good.”
In June, Reliance sold its director’s and officers’ liability insurance and its inland marine, excess and surplus insurance product lines to Hartford Financial Services Group Inc. for an undisclosed amount. Kemper Insurance Cos. also announced it would acquire the renewal rights to a portion of Reliance National’s book of business. And last month, property and life insurer Leucadia National Corp. backed away from a proposed $293 million purchase of Reliance.
On Tuesday, Standard & Poor’s cut its rating on Reliance senior and subordinated debt to ‘CC’ from ‘CCC’, making it low junk grade, just two steps from default. The agency believes Reliance’s ability to pay or restructure its debt is very questionable and may further cut Reliance ratings.
Was this article valuable?
Here are more articles you may enjoy.