AM Best has removed the reinsurance subsidiaries of PXRE from under review and affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of “a-”.
AM Best also removed PXRE's existing debt ratings from under review and affirmed the (ICR) of “bbb-”.
In addition, the ratings agency has assigned indicative debt ratings of “bbb-” to senior unsecured debt, “bb+” to subordinated debt and “bb” to preferred stock that can be issued under PXRE's recently filed $700m universal shelf registration.
All ratings have been assigned a negative outlook.
AM Best said the affirmations follow its review of PXRE's capitalization action plan after incurring losses from hurricanes Katrina, Rita and Wilma.
This action plan includes both a reduction in the company's risk profile and addition to capital. As part of this plan, PXRE issued risk linked securities providing coverage for a significant catastrophic event and a potential second catastrophic event.
AM Best said the combination of these actions has stabilized PXRE's current ratings.
