Endurance (ENH) Ratings Placed Under Review with Positive Implications by A.M. Best

October 5, 2016 3:01 PM EDT

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A.M. Best has placed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of Endurance Specialty Insurance Ltd. (Endurance) (Bermuda) and its rated affiliates under review with positive implications. Concurrently, A.M. Best has placed the Long-Term ICR of “bbb” and the Long-Term Issue Credit Ratings (Long-Term IR) of its publicly traded parent, Endurance Specialty Holdings Ltd. (Bermuda) (NYSE: ENH), under review with positive implication. (See below for a detailed listing of the companies and ratings.)

These Credit Rating (rating) actions follow the recent announcement that Endurance Specialty Holdings Ltd. (Endurance) has entered into a definitive agreement with SOMPO Holdings, Inc. (Sompo), under which Sompo will acquire Endurance. Under the terms of the transaction, Sompo will pay approximately $6.3 billion to acquire 100% of the outstanding ordinary shares of Endurance, which translates to $93 per share. The transaction remains subject to shareholder and regulatory approval and is expected to close in the first quarter of 2017.

The under review with positive implications status reflects the potential financial and operational benefits that will be derived from Endurance being a significant operation within a larger, higher-rated organization. The ratings will remain under review pending the completion of the transaction and review by A.M. Best regarding Sompo’s future operating plans for Endurance.

The FSR of A (Excellent) and the Long-Term ICRs of “a” have been placed under review with positive implications for Endurance Specialty Insurance Ltd. and its following affiliates:

  • Endurance Assurance Corporation
  • Endurance Worldwide Insurance Limited
  • Endurance American Specialty Insurance Company
  • Endurance American Insurance Company
  • Endurance Risk Solutions Assurance Co.
  • American Agri-Business Insurance Company

The following Long-Term IRs of Endurance Specialty Holdings Ltd. have been placed under review with positive implications

--“bbb” on $335 million 7% senior unsecured notes, due 2034

--“bbb” on $300 million 4.7% senior unsecured notes, due 2022 (unconditionally assumed from Montpelier Re Holdings Ltd.)

--“bb+” on $230 million 7.5% Series B non-cumulative preferred shares

The following indicative shelf ratings have been placed under review with positive implications for debt securities available under the existing shelf registration for Endurance Specialty Holdings Ltd.:

--“bbb” on senior unsecured debt

--“bbb-”on subordinated debt

--“bb+” on preferred stock

Endurance Holdings Capital Trust I & II (guaranteed by Endurance Specialty Holdings Ltd.):

--“bb+” on preferred securities

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