Moody's has lowered its ratings for Trenwick Group amid concerns over its financial health.

In a move which comes as a blow to the insurer, Moody's lowered Trenwick's senior debt ratings from Ba3 to B3 and kept them on indefinite review.

A statement said Trenwick is in; "violation of a covenant related to its revolving credit facility. With the
triggering of a covenant violation, the bank syndicate now has the right to demand collateral. Moody's believes that Trenwick does not have sufficient liquidity to meet such funding as may be required

"Given these pressures, and without access to new capital, it is possible that the company will be forced to default on or restructure its near term financial obligations."

However the ratings agency pointed out that Trenwick has taken significant steps to improve its position. Trenwick is also putting in place funding for the its Lloyd's operations.

Topics