S&P rates Flatiron loan BB+

Standard & Poor's said it assigned a BBB- counterparty credit rating to Flatiron Re Ltd. and a BB+ senior secured debt rating to the company's $256 million term loan facility.

The outlook is stable.

Flatiron Re is a limited-life, special-purpose, class 3 reinsurance company based in Bermuda and set up specifically to offer reinsurance to Arch Reinsurance Ltd. (A-/stable).

The ratings on Flatiron are based on peril modeling supportive of investment-grade outcomes, Arch's brief but solid track record in managing property catastrophe risk and Flatiron's predetermined risk tolerances, S&P said.

These positive factors are offset in part by Flatirons limited corporate powers, as the company can neither refuse business from Arch nor change the underwriting arrangement, its high financial leverage and the structural subordination of the bank debt relative to policyholder claims, the agency said.

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