Tower Group International has had its issuer credit ratings (ICR) downgraded from cc to c by rating agency AM Best.
The rating actions take into consideration the insurer’s most recent Securities and Exchange Commission 10Q filing, which included a net loss of $106 million and GAAP shareholders’ equity (excluding noncontrolling interests) of minus $11 million.
“In addition, these rating downgrades reflect the heightened uncertainty around TWGP’s ability to repay its senior debt holders in the event its pending merger with ACP Re does not occur on or before September 15, 2014.
“These actions also consider the additional ratings drag placed on all of TWGP’s operating entities in terms of their ability to pay claims. In addition, AM Best remains concerned with the continued delays in TWGP reporting its quarterly SEC filings, as well as its ability to operate as a going concern,” the rating agency said.
AM Best also downgraded the financial strength ratings to C (weak) from C++ (marginal) and the (ICR) to ccc from b of the pooled and reinsured members of the Tower US Pool and CastlePoint Reinsurance Company (Bermuda). The ratings will remain under review pending the planned merger.
AM Best, Tower Group, ICR, SEC