Accredited ratings remain under review
Bermuda-based R&Q Insurance Holdings subsidiary Accredited and its affiliated companies’ financial ratings remain under review until its sale is completed, ratings agency AM Best said.
AM Best made the announcement after it emerged that R\&Q was considering an alternative approach to selling the company to Canadian private equity investment firm Onex.
Arizona-based Accredited Specialty insurance, Florida-registered Accredited Surety and Casualty and Malta-domiciled Accredited Insurance (Europe) retain their A- financial strength ratings bur are under review with developing implications, AM Best said.
The ratings agency said R&Q had stated that Onex had provided R&Q with an alternative transaction structure to the original sale that would be implemented if the closing conditions of the original sale could not be met.
It said the “the alternative structure appears to be incrementally credit-positive for Accredited, relative to the original proposal”.
“The alternative would involve the parent company, R&Q, filing for a provisional liquidation in Bermuda and then completing the sale of Accredited through that process. This follows R&Q incurring significant additional unexpected costs and expenses, in addition to the company being constrained in its ability to consummate external legacy transactions.
“These factors, as well as further adverse reserve development, have had a material negative impact on the company’s stability as a business and as a going concern. The R&Q board is exploring available options, including the alternative proposal and potential sources of liquidity while trying to complete the original sale.”
AM Best added it had placed Accredited\s ratings under review with developing implications last October when R&Q agreed Randall & Quilter America Holdings Inc., the intermediate holding company of Accredited, to funds advised by the Onex.
“The ratings are expected to remain under review until the sale process is complete, which is expected to be end of the second quarter for 2024 or shortly thereafter, at which point AM Best will assess the quality and extent of support provided by Onex to Accredited and resolve the ratings review.”
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