Published: August 05, 2011
A.M. Best Revises Outlook to Negative and Affirms Ratings of Alterra Capital Holdings Limited and Its Operating Subsidiaries
OLDWICK, N.J. - (BUSINESS WIRE) - A.M. Best Co. has revised the outlook to negative from stable and
affirmed the financial strength rating (FSR) of A (Excellent) and issuer
credit ratings (ICR) of "a" of Alterra Bermuda Limited (Alterra
Bermuda) and its affiliated operating companies.
Concurrently, A.M. Best has revised the outlook to negative from stable
and affirmed the ICR of "bbb" of Alterra Bermuda's parent company, Alterra
Capital Holdings Limited (Alterra) [NASDAQ: ALTE]. A.M. Best also
has revised the outlook to negative from stable and affirmed all debt
ratings of Alterra, Alterra USA Holdings Limited, Alterra
Finance, LLC (both domiciled in Delaware) and Alterra Capital
Trust I. All the above named companies are domiciled in Bermuda,
unless otherwise specified. (See below for a detailed listing of the
companies and ratings.)
The revised outlook for Alterra and its subsidiaries reflects the
recently announced departure of John Berger from the organization's
executive management level and Board of Directors. This change has taken
place less than a year and a half after Alterra's formation, which was
the result of the merger between Max Capital Group Ltd. and Harbor Point
Limited. A.M. Best views this recent announcement as a material change
in the management structure, which was initially considered by A.M. Best
at the time of the merger. In May 2010, when the ratings were assigned
to Alterra and its operating subsidiaries, A.M. Best gave significant
consideration to the organizational structure of the Board of Directors,
the executive management team and the key committees that were
established to help steer and execute the strategy of the company. A.M.
Best still views these elements to be critical to the organization and
will continue to monitor the development of the company and its
operational strategy. While from A.M. Best's perspective the recent
change in management has introduced a new level of uncertainty to the
organization in terms of execution and development of future business
strategies and retention of other key personnel, A.M. Best recognizes
that currently Alterra has a deep bench of talent to draw upon to help
lead the organization over the near term.
The FSR of A (Excellent) and ICR of "a" have been affirmed for Alterra
Bermuda Limited and its following operating subsidiaries:
-
Alterra Reinsurance Europe plc
-
Alterra Europe plc
-
Alterra America Insurance Company
-
Alterra Excess and Surplus Insurance Company
-
Alterra Reinsurance USA Inc.
The following debt ratings have been affirmed:
Alterra USA Holdings Limited (guaranteed by Alterra Capital
Holdings Limited)-
--" bbb" on $100 million 7.2% senior secured notes, due 2017
Alterra Finance, LLC (guaranteed by Alterra Capital Holdings
Limited)-
--" bbb" on $350 million 6.25% senior unsecured notes, due 2020
The following indicative ratings under the current shelf registration
have been affirmed:
Alterra Capital Holdings Limited-
--" bbb" on senior unsecured debt
--" bbb-" on subordinated debt
--" bb+" on preferred stock
Alterra USA Holdings Limited (guaranteed by Alterra Capital
Holdings Limited)-
--" bbb" on senior secured debt
--" bbb-" on subordinated debt
Alterra Capital Trust I (guaranteed by Alterra Capital Holdings
Limited)-
--" bb+" on preferred securities
The principal methodology used in determining these ratings is Best's
Credit Rating Methodology -- Global Life and Non-Life Insurance Edition,
which provides a comprehensive explanation of A.M. Best's rating process
and highlights the different rating criteria employed. Additional key
criteria utilized includes: "Rating Members of Insurance Groups" and
"Risk Management and the Rating Process for Insurance Companies."
Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright (c) 2011 by A.M. Best Company, Inc. ALL RIGHTS
RESERVED.
A.M. Best Co.
Greg Reisner, 908-439-2200, ext. 5224
Senior
Financial Analyst
greg.reisner@ambest.com
or
Robert
DeRose, 908-439-2200, ext. 5453
Vice President
robert.derose@ambest.com
or
Carole
Lovell, 908-439-2200, ext. 5445
Public Relations Associate
carole.lovell@ambest.com
or
Jim
Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public
Relations
james.peavy@ambest.com
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