2013-09-19 16:32:02 -
A.M. Best Europe – Rating Services Limited has affirmed the financial strength ratings (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of the key operating subsidiaries of Atradius N.V. (Atradius) (Netherlands): Atradius Credit Insurance N.V. (ACI) (Netherlands), Compañía Española de Seguros y Reaseguros de Crédito y Caución S.A. (CyC) (Spain), Atradius Reinsurance Limited (ARe) (Ireland) and Atradius Trade Credit Insurance, Inc (ATCI) (US).
Concurrently, A.M. Best has affirmed the debt rating of ”bbb+” on the EUR 120 million fixed to floating rate step-up guaranteed subordinated bonds, issued by Atradius Finance, B.V., and unconditionally and irrevocably guaranteed by Atradius and ACI. The outlook for all ratings is stable.
The ratings reflect A.M. Best’s expectation that risk-adjusted capitalisation will continue to
be maintained at an excellent level, both at the consolidated and individual subsidiary levels. Atradius’ risk-adjusted ccapitalisation is likely to remain supported by the group’s robust earnings generation and cautious approach to growth, given the uncertain economic conditions within its core European markets.
The ratings also consider the strategic importance of ACI, CyC, ARe and ATCI, through their presence in key markets around the world.
Additionally, ACI remains the main revenue and earnings contributor to Atradius, while ARe remains of strategic importance as the group’s licensed reinsurer of third-party and intra-group business.
The benefit of corrective actions taken by Atradius to sustain its overall good technical results continues to materialise. As at half-year 2013, the Spanish and Portuguese account produced a combined ratio of 87% (half-year 2012: 109%) on the back of the protracted economic downturn. Although A.M. Best recognises the potential downside risk associated with Atradius’ operation in these markets (representing 25% of consolidated gross written premium at half-year 2013), A.M. Best believes that the group has implemented measures that will continue to support positive performance.
The ratings of ACI, CyC ,ARe and ATCI incorporate a view of the relationship with their ultimate majority shareholder, Grupo Catalana Occidente S.A. (GCO) (Spain), whose key subsidiaries outside the Atradius group maintain an FSR of A- (Excellent) and an ICR of “a-”. GCO is a leading non-operating insurance holding group within the local Spanish market. A.M. Best believes that the Atradius group of companies maintains a high degree of financial and operational independence from the other operations of GCO. GCO’s consolidated risk-adjusted capitalisation is considered to be maintained at a strong level.
Positive rating actions are unlikely in the medium term. Negative rating actions could occur if risk-adjusted capitalisation was considered to be unsupportive of the current rating levels, both at the consolidated and stand-alone entity levels. A sustained decline in operating performance, particularly in relation to Atradius’
Spanish and Portuguese portfolio, could also result in negative pressure on the ratings of Atradius. Furthermore, a change in A.M. Best’s perception regarding the fungibility of capital across the Atradius group of companies or in the perceived level of independence from GCO would likely result in negative rating actions.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
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