S&P downgrades Istmo Re

S&P said it lowered its global scale financial strength and issuer credit ratings on Istmo Compania de Reaseguros, Inc. (Istmo Re) and on its core subsidiaries, Liffey Reinsurance Co. Ltd. and Istmo Mexico Compania de Reaseguros SA de CV (Istmo Re Mexico), to BB from BBB-.

The agency also downgraded its national scale ratings on Istmo Re Mexico to mxA from mxAA.

All ratings on these entities were placed on CreditWatch negative.

S&P said the downgrade reflects its view that the deteriorating operating performance will erode Istmo Re's capital, hamper its ability to service its debt, and hinder its ability to compete in the market.

Furthermore, the agency believes the company's competitive position has weakened, as Istmo Re is pursuing an aggressive strategic overhaul through the expansion of its lines of business and operations in regions where it currently doesn't have a strong presence.

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