S&P downgrades Istmo Re

S&P said it revised the counterparty credit and financial strength ratings on Istmo Compania de Reaseguros, Inc. (Istmo Re) to D from R (under regulatory supervision).

The agency also said it withdrew the ratings.

The downgrade follows the Panamanian insurance regulator's decision to forcibly liquidate the company, S&P said.

The regulator took control of Istmo Re in December 2016, the agency noted, and this most recent decision is viewed as the end of the regulatory supervision process.

The forced liquidation reflects the deterioration of Istmo Re's financial position and its inability to meet its short- and long-term financial and policyholder obligations, including payment default on policyholder obligations and failure to comply with payment agreements with ceding companies, S&P said.

The forced liquidation process also considers the company's payment default on bank obligations, which triggered the execution of guarantees backing loans, the agency said.

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