News Column

A.M. Best Assigns Debt Rating to Fairfax (US) Inc.’s Senior Unsecured Notes; Comments on Regulatory Inquiry

August 7, 2014



OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Besthasassigned an issuer credit rating of “bbb” to Fairfax (US) Inc. (headquartered in Delaware), a subsidiary of Fairfax Financial Holdings Limited (Fairfax) [TSX: FFH and FFH.U] (Toronto, Canada), and a debt rating of “bbb” to its $300 million 4.875% senior unsecured notes due 2024. Fairfax is the guarantor of the notes. The outlook assigned to the ratings is stable.

Fairfax (US) Inc.’s ratings reflect its position as an intermediate holding company in the Fairfax organization and the implicit and explicit benefits of being part of the Fairfax enterprise.

It is Fairfax (US) Inc.’s intention to use the net proceeds primarily to refinance certain indebtedness of Fairfax and its subsidiaries. Following the notes issue, financial leverage and coverage measures at Fairfax are expected to remain within A.M. Best’s guidelines for the assigned ratings.

In addition, A.M. Best comments that the ratings of Fairfax and its subsidiaries are unchanged following Fairfax’s disclosure that The AutoritÉ des marchÉs financiers, the securities regulatory authority in the Province of Quebec, is conducting an investigation of Fairfax, its CEO, Prem Watsa, and its President, Paul Rivett. The investigation concerns the possibility of illegal insider trading and/or tipping (not involving any personal trading by the individuals) in connection with a Quebec transaction. A.M. Best will continue to monitor the situation as further details concerning the investigation are disclosed and will take future rating actions if warranted.

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.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2014 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.



A.M. Best

Darian Ryan,908-439-2200, ext. 5449

Senior Financial Analyst

darian.ryan@ambest.com

or

Michael Lagomarsino, CFA,908-439-2200, ext. 5810

Assistant Vice President

michael.lagomarsino@ambest.com

or

Christopher Sharkey, 908-439-2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

or

Jim Peavy, 908-439-2200, ext. 5644

Assistant Vice President, Public Relations

james.peavy@ambest.com

Source: A.M. Best Company, Inc.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Business Wire


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters