Moody's Investors Service has downgraded the performance rating of R J Kiln Syndicate 308 from B-minus to C-plus.
The move came as the life syndicate, which has a capacity of £4m, recorded losses in five out of the eight years that it has reported its results.
A statement by Moody's said a further loss of 7.5% to 12.5% was predicted for 2000 with a small profit currently forecast for 2001.
It added the downgrade was partly due to plans for the syndicate to be predominantly supported by third party sources of capital. It is currently 61% backed by Kiln.
The statement said: "Moody's considers that, given the scale of the syndicate operations, the track record of the syndicate to-date, and with the confirmation by Kiln the syndicate is not viewed as a core business, there is the potential for the syndicate to be merged into another life
operation or put into run-off and this is likely to affect future returns."
