FEBRUARY 15, 2013 12:00 AM (EST)
A.M. Best Places Ratings of Sagicor Financial Corp. & Its Subsidiaries Under Review; Downgrades Ratings of Sagicor Life Jamaica
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Assistant Vice President, Public Relations
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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - FEBRUARY 15, 2013 12:00 AM (EST)
A.M. Best Co. has placed under review with negative implications the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of Sagicor Life Inc., Sagicor Capital Life Insurance Company Limited (both domiciled in St. Michael, Barbados), Sagicor General Insurance Inc. (Sagicor General) (Bridgetown, Barbados) and Sagicor Life Insurance Company (Sagicor Life USA) (Austin, TX). Additionally, A.M. Best has downgraded the FSR to B+ (Good) from B++ (Good) and ICR to "bbb- from bbb of Sagicor Life Jamaica Limited (SLJ) (Kingston, Jamaica) and placed the ratings under review with negative implications.
Concurrently, A.M. Best has placed under review with negative implications the ICR of "bbb-" and debt rating of "bbb" on $150 million, 7.5% senior unsecured notes due 2016 of the ultimate parent, Sagicor Financial Corporation (SFC) (Barbados). SFC is publicly traded on Barbados, Trinidad and London stock exchanges.
The under review status follows the announcement of a debt exchange program by the Government of Jamaica, which A.M. Best notes is the second such program in three years. Under the program, eligible investors would receive new notes that have lower coupons and longer maturities. Given SFCs exposure to the business and financial risks of Jamaica through its controlling interest in SLJ, the ratings of SFC and its subsidiaries have been placed under review with negative implications.
The downgrading of the ratings of SLJ reflects its sizeable exposure to the Jamaican government securities, as well as the ongoing pressures of the weak Jamaican economy. A.M. Best expects that the bond exchange will have a negative impact on SLJs risk-adjusted capital and earnings position.
The ratings will remain under review pending further clarification of the full impact of the exchange program on the results and capitalization of the group.
The methodology used in determining these ratings is Bests Credit Rating Methodology, which provides a comprehensive explanation of A.M. Bests rating process and contains the different rating criteria employed in the rating process. Additional key criteria utilized include: Evaluating Country Risk; Rating Members of Insurance Groups; and Understanding Universal BCAR. Bests Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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