CHICAGO, May 24 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has placed
the `A` (Single-A) claims paying ability rating of Imperial Fire & Marine
Reinsurance Company Ltd. on Rating Watch -- Uncertain. This action follows
the recent announcement that the company has entered into a definitive
agreement to be acquired by The Rhine Re Group (Rhine Re) of Switzerland.
DCR believes that the acquisition should offer both entities several
strategic advantages, as the combination of Imperial Re and Rhine Re will
create a more strongly positioned reinsurance organization with a broader
global perspective. Rhine Re is a worldwide reinsurer with offices in the
world`s leading reinsurance marketplaces. Imperial Re is a United
Kingdom-based specialty reinsurer with a focus on London market and emerging
market business. The businesses appear complementary in DCR`s view.
Further, the addition of $150 million of equity capital from Kohlberg
Kravis Roberts & Co. (KKR) to both support the acquisition financing and
bolster the balance sheet after a challenging 1999 puts the combined
organization on an improved financial footing.
The Rating Watch recognizes that full details surrounding the integration
and proforma financial profile of the combined operation are not yet final.
DCR hopes to discuss these issues with management of both Imperial Re and
Rhine Re in the near future. The Rating Watch will likely be resolved on or
close to the consummation of the acquisition, which is still subject to normal
regulatory reviews and approvals.
DCR believes that the resolution of the Rating Watch may require
establishment of a `group rating` on the combined Rhine Re and Imperial Re
operations. DCR understands certain financial support agreements will likely
be put in place between the various legal reinsurance entities within the
combined group. DCR does not currently publish a rating on Rhine Re.
For additional information, visit DCR`s Web site at http://www.dcrco.com
(Quick Search: Imperial Re). DCR`s research is also available on Bloomberg
at DCR, FirstCall`s BondCall Direct/Research Direct at
http://www.firstcall.com and Multex at http://www.multex.com, as well as
through other third-party providers.
SOURCE Duff & Phelps Credit Rating Co.
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Related links:
http://www.dcrco.com
CONTACT:
Keith M. Buckley, CFA, 312-368-3211,
buckley@dcrco.com, or Geoffrey Mayne, +44-207-417-4222,
GMayne@fitchibca.com, both of DCR
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