Best Assigns Debt and ICR Ratings to U.K.’s Beazley

A.M. Best Co. announced that it has assigned a rating of “bbb-” to the forthcoming $18 million of floating rate subordinated notes due 2034 to be issued by the U.K.’s Beazley Group Plc., the non-operating holding company of the Beazley group of companies.

“These notes will be junior to all other forms of debt issued by Beazley,” said Best. The rating agency also noted that it has assigned an issuer credit rating (ICR) of “bbb+” to Beazley. The outlook for both ratings is stable. Beazley owns Beazley Furlonge Limited, the managing agency of Lloyd’s Syndicate 623 and Lloyd’s Syndicate 2623.

“The proceeds of this issue will be used to partially fund the acquisition of Omaha Property and Casualty Insurance Company (OPAC), a U.S. admitted lines insurer, currently rated ‘A’ (Excellent),” the bulletin stated (See IJ Website Nov. 5). “This rating is under review with developing implications pending completion of the acquisition.”

Best also noted that “its ‘A’ (Excellent) financial strength and ‘a+’ issuer credit ratings of syndicates 623 and 2623 remain unaffected following Beazley’s announcement that it is to raise approximately GBP 105 million (USD 194 billion) net of expenses by means of a rights issue. The proceeds of this issue are likely to be used to partially fund the acquisition and capitalisation of OPAC and to provide additional funds to support Beazley’s increased participation in its existing underwriting business at Lloyd’s. Beazley is likely to own at least 70 percent (up from 54 percent in 2004) of the combined allocated underwriting capacity of syndicates 623 and 2623 in 2005, which is likely to remain unchanged at GBP 741 million (USD 1.4 billion).”