Moody's rates Crum & Forster note Ba3

Moody's Investors Service said it assigned a Ba3 rating to the $330 million senior unsecured notes due 2017 to be issued by Crum & Forster Holdings Corp.

The outlook is stable.

The net proceeds from the notes will used to purchase some or all of Crum & Forster's currently outstanding $300 million senior unsecured notes due in 2013, which have a June 2008 call date.

The agency said Crum & Forster's ratings reflect its diversified revenue stream by geography and product, a centralized underwriting approach that has produced steadily improving underwriting results and a high-quality investment portfolio with downside equity risk partially mitigated by a hedging strategy.

Offsetting these strengths are significant financial leverage and debt service requirements at parent company Fairfax Financial Holdings Ltd., exposure to asbestos and environmental claims and exposure to natural and man-made catastrophes, Moody's said.

The new notes represent a modest positive for Crum & Forster because the effective maturity of the debt is extended, the semi-annual coupon payments are likely to be lower and a number of covenants will be eliminated, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.