AM Best has downgraded the financial strength rating of Rosemont Re, to B (Fair) from A- (Excellent) and the issuer credit rating (ICR) to “bb“ from “a-“.
Both ratings have been removed from under review and assigned a negative outlook.
AM Best said these rating actions follow Rosemont's recent announcement that discussions to recapitalize the company following losses incurred from Hurricanes Katrina and Rita have ceased, placing the company effectively into run-off.
The ratings agency said that without the possibility of attracting new capital, Rosemont no longer has the financial capacity necessary to maintain its current property catastrophe business profile.
In a statement, AM Best said the rating downgrade also considers debt totaling approximately $64m at 30 June, 2005, held at Rosemont's immediate parent company, Goshawk Holdings, a subsidiary of Goshawk.
As the only operating subsidiary held by Goshawk Bermuda, in addition to servicing its own loss reserves Rosemont will be the only source of funds available to pay off the parent company's debt.
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