Fitch rating agency has taken several actions regarding the ratings of Fremont General Corp., including lowering Fremont’s senior debt rating to ‘CCC-‘ from ‘B-‘ and the preferred securities of Fremont’s subsidiary Fremont General Financing I to ‘CC’ from ‘CCC’. The Fremont Compensation Insurance Group’s insurer financial strength rating was lowered to ‘DDD’ from ‘BB-‘ and the ‘BB-‘ IFS ratings of Fremont Employers Ins. Co. and Fremont Indemnity Co. of the Northwest were withdrawn.
The rating action affects approximately $505 million of debt and preferred stock outstanding. The Rating Outlook has been moved from Negative to Evolving. The rating actions follow Fremont’s announcement of an agreement with the California Department of Insurance that gives the DOI increased regulatory oversight of its operations.
This agreement limits Fremont’s ability to write insurance premiums and pay insurance subsidiary dividends. Fremont further agreed to obtain prior DOI approval of future material transactions and to provide additional capital to the insurance subsidiaries in annual installments beginning in 2001.
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