Standard & Poor’s Ratings Services announced that it has lowered its rating on Mariah Re Ltd.’s Series 2010-1 notes to ‘CC(sf)’ from ‘CCC(sf)’ and removed the rating from CreditWatch, where it was placed with negative implications on Oct. 4, 2011.
“The cedent, American Family Mutual Insurance Co., submitted an event notice to Mariah Re Ltd. that indicated they believe the attachment point has been breached and Mariah Re Ltd. will owe them a payment on Dec. 31, 2011, the next payment date,” S&P explained.
“In addition, Mariah Re Ltd. submitted an event report request to AIR Worldwide Corp., which requires AIR, pursuant to the terms in the calculation agent agreement, to calculate the sum of covered events and the issuer payment amount. Because of the reporting requirements in the transaction, we have not received notice as to which events resulted in an increase to the covered loss amount. However, we believe the results from AIR’s calculation will confirm that the covered losses have exceeded the initial attachment level.
“The initial attachment level is $825 million and, through Sept. 30, covered losses totaled $790.15 million. We expect the additional reported covered losses to exceed the difference of $34.85 million, which will result in a reduction in the outstanding principal balance. We expect to maintain the ‘CC(sf)’ rating on the notes until Mariah Re Ltd. makes an issuer payment to the cedent, and then we will lower the rating to ‘D(sf)’.”
Source: Standard & Poor’s
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