A.M. Best Downgrades Ratings of PartnerRe Ltd. and Its Subsidiaries; Remains Under Review With Negative Implications

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has downgraded the financial strength rating (FSR) to A (Excellent) from A+ (Superior) and the issuer credit ratings (ICR) to “a+” from “aa-” of Partner Reinsurance Company Ltd. (PartnerRe) and its affiliates. A.M. Best also has downgraded the ICR to “bbb+” from “a-” and the issue ratings of PartnerRe’s parent, PartnerRe Ltd. This rating action follows the announcement that PartnerRe Ltd and AXIS Capital Holdings Limited (AXIS) have terminated a definitive amalgamation agreement and that PartnerRe Ltd has entered into a definitive agreement to be acquired by Italian investment firm EXOR, S.p.A. The ratings remain under review with negative implications. PartnerRe Ltd and PartnerRe are domiciled in Hamilton, Bermuda. (See below for a detailed list of the companies and ratings.)

The rating action is based on existing A.M. Best concerns regarding PartnerRe’s concentration in reinsurance and lack of a diversified product platform, in particular, the ability to provide both primary and reinsurance solutions. The proposed merger with AXIS would have begun to address these issues and with that transaction terminated these concerns are brought back to the forefront. Additionally, A.M. Best is concerned that any such diversification initiatives at PartnerRe have been delayed because of the now terminated merger agreement with AXIS. These concerns are magnified given the current challenging reinsurance market conditions.

The under review status remains due to remaining uncertainty regarding senior leadership at PartnerRe, particularly the role of CEO and additional information required regarding EXOR’s plans for PartnerRe. The under review status will be removed after the closing of the EXOR–PartnerRe transaction.

The FSR has been downgraded to A (Excellent) from A+ (Superior) and the ICRs have been downgraded to “a+” from “aa-” and remain under review with negative implications for Partner Reinsurance Company Ltd. and its following affiliates:

• Partner Reinsurance Company of the U.S.
• PartnerRe Insurance Company of New York
• PartnerRe Ireland Insurance Limited
• Partner Reinsurance Europe SE
• PartnerRe America Insurance Company

The following issue ratings have been downgraded and remain under review with negative implications:

PartnerRe Ltd.—

-- to “bbb-” from “bbb” on $230 million 6.5% preferred shares, Series D

-- to “bbb-” from “bbb” on $325 million 7.25% preferred shares, Series E

-- to “bbb-” from “bbb” on $250 million 5.875% preferred shares, Series F

PartnerRe Finance A LLC—

-- to “bbb+” from “a-” on $250 million 6.875% senior unsecured notes, due 2018

PartnerRe Finance B LLC—

-- to “bbb+” from “a-” on $500 million 5.5% senior unsecured notes, due 2020

PartnerRe Financial II, Inc.—

-- to “bbb-” from “bbb” on $250 million 6.44% junior subordinated capital efficient notes, due 2066

The following indicative ratings under the shelf registration have been downgraded and remain under review with negative implications:

PartnerRe Ltd.—

-- to “bbb+” from “a-” on senior unsecured debt

-- to “bbb” from “bbb+” on subordinated debt

-- to “bbb-”from “bbb” on preferred stock

PartnerRe Financial II, Inc. (guaranteed by PartnerRe Ltd.)—

-- to “bbb+” from “a-” on senior unsecured debt

-- to “bbb” from “bbb+” on subordinated debt

-- to “bbb-” from “bbb” on preferred stock

PartnerRe Capital Trust II and III (guaranteed by PartnerRe Ltd.)—

-- to “bbb” from “bbb+” on trust preferred securities

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

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 © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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A.M. Best Company, Inc.

Scott Mangan, 908-439-2200, ext. 5593

Senior Financial Analyst

[email protected]

or

Greg Reisner, 908-439-2200, ext. 5224

Managing Senior Financial Analyst

[email protected]

or

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

Manager, Public Relations

[email protected]

or

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

Assistant Vice President, Public Relations

[email protected]

Source: A.M. Best Company, Inc.