{"id":385505,"date":"2020-11-19T15:29:18","date_gmt":"2020-11-19T20:29:18","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=385505"},"modified":"2020-11-19T15:29:18","modified_gmt":"2020-11-19T20:29:18","slug":"am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\/","title":{"rendered":"AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries"},"content":{"rendered":"<p>        <!--.bwalignc { text-align: center; list-style-position:inside; }body {font:normal small Arial,Helvetica,sans-serif;color:#000;background-color:#fff;padding:24px;margin:0;} a img {border:0;} h3 {font-size:medium;color:#000;margin:0 0 1em 0; text-align:center;}-->  <\/p>\n<p class=\"bwalignc\"><b>AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries <\/b><\/p>\n<p>OLDWICK, N.J.&#8211;(<a href=\"http:\/\/www.businesswire.com\">BUSINESS WIRE<\/a>)&#8211;<b>AM Best <\/b>has maintained the under review with negative implications status for the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of \u201ca-\u201d of Watford Re Ltd. (Watford Re) (Bermuda) and its subsidiaries, Watford Insurance Company Europe Limited (WICE) (Gibraltar), Watford Insurance Company (WIC) (New Jersey) and Watford Specialty Insurance Company (WSIC) (New Jersey). In addition, AM Best has maintained the under review with negative implications status for the Long-Term ICR of \u201cbbb-\u201d and the Long-Term Issue Credit Rating of \u201cbb\u201d on the $225 million ($52 million outstanding) 8.5% cumulative preference shares of Watford Holdings Ltd. (Watford) (Bermuda) [NASDAQ: WTRE], the group\u2019s ultimate holding company.\n<\/p>\n<p>\nThis Credit Rating (rating) action considers the recent announcement that Arch Capital Group Ltd. (Arch) [NASDAQ: ACGL] has revised its merger agreement with Watford to an all-cash offer of $35 per share. The revised offer is valued at approximately $700 million and represents a premium of approximately 96% to Watford\u2019s unaffected closing common share price on Sept. 8, 2020, the last trading day prior to media reports about the possibility of a transaction between Watford and Arch. The rating action also considers Watford\u2019s progress to date in limiting the group\u2019s exposure to investment volatility through de-risking its investment portfolio, which incurred sizable losses during the first quarter of 2020.\n<\/p>\n<p>\nAM Best acknowledges that the proposed transaction with Arch could benefit the Watford group through potential further de-risking of its investment portfolio, removing the burden of public company status, and possible rating enhancement stemming from being a member of a very large, well-diversified group. However, AM Best has maintained the under review with negative implications status given Watford\u2019s significant, albeit somewhat improved, exposure to investment losses stemming mostly from its non-investment grade bond portfolio, which is subject to significant unrealized losses if credit spreads widen.\n<\/p>\n<p>\nIn the first quarter of 2020, the Watford group incurred investment losses of about $300 million due to investment market volatility following the COVID-19 pandemic related economic shutdowns mandated by governments around the world. This loss materially impacted the group\u2019s risk adjusted capital position and operating performance. Following that first quarter investment loss, Watford continues to take steps to lower the risk profile on its investment portfolio. However, the investment portfolio\u2019s exposure to unrealized losses may still have a substantial impact on Watford\u2019s financial performance, the probability of which is uncertain due to the pandemic and the impact that resulting economic shut-downs may have on credit spreads. Through the third quarter of 2020, the group\u2019s year-to-date investment income has improved to approximately $29 million.\n<\/p>\n<p>\nAM Best will reassess the under review implications status as the group continues to de-risk. The transaction is expected to close in the first quarter of 2021 and remains subject to customary conditions, including regulatory and shareholder approval. Arch expects to assign its interests and obligations under the merger agreement to a newly formed entity under which Arch will own approximately a 40% stake, with funds managed by Warburg Pincus LLC and Kelso &amp; Company each owning approximately 30%.\n<\/p>\n<p>\nThe under review status is expected to be resolved when the transaction closes and AM Best has met with management and analyzed the group&#8217;s business plans, including an analysis of future investment risk, financial projections and operating structure within the Arch group. AM Best will continue to evaluate Watford\u2019s balance sheet strength, operating performance and enterprise risk management to assess that it stays in line with projected amounts.\n<\/p>\n<p><b>This press release relates to Credit Ratings that have been published on AM Best\u2019s 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 see AM Best\u2019s <a rel=\"nofollow\" href=\"https:\/\/cts.businesswire.com\/ct\/CT?id=smartlink&amp;url=http%3A%2F%2Fratings.ambest.com%2Fratingeventdisclosures.aspx&amp;esheet=52332710&amp;newsitemid=20201119006237&amp;lan=en-US&amp;anchor=Recent+Rating+Activity&amp;index=1&amp;md5=dea33b9aa5490ca6dd53d4d23c08cf09\">Recent Rating Activity<\/a> web page. For additional information regarding the use and limitations of Credit Rating opinions, please view <a rel=\"nofollow\" href=\"https:\/\/cts.businesswire.com\/ct\/CT?id=smartlink&amp;url=http%3A%2F%2Fwww3.ambest.com%2Fambv%2Fratingmethodology%2FOpenPDF.aspx%3Fri%3D1320&amp;esheet=52332710&amp;newsitemid=20201119006237&amp;lan=en-US&amp;anchor=Guide+to+Best%26%238217%3Bs+Credit+Ratings&amp;index=2&amp;md5=2aaf9abae60810d95ae9ca4494c3bc69\">Guide to Best\u2019s Credit Ratings<\/a>. For information on the proper media use of Best\u2019s Credit Ratings and AM Best press releases, please view <a rel=\"nofollow\" href=\"https:\/\/cts.businesswire.com\/ct\/CT?id=smartlink&amp;url=http%3A%2F%2Fwww.ambest.com%2Fabout%2FMediaGuide-BestsCreditRatingsProperUse.pdf&amp;esheet=52332710&amp;newsitemid=20201119006237&amp;lan=en-US&amp;anchor=Guide+for+Media+-+Proper+Use+of+Best%26%238217%3Bs+Credit+Ratings+and+AM+Best+Rating+Action+Press+Releases&amp;index=3&amp;md5=f0ca49074b9d8ef4c7e4e6cc326db295\">Guide for Media &#8211; Proper Use of Best\u2019s Credit Ratings and AM Best Rating Action Press Releases<\/a>.<\/b><\/p>\n<p><b>AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit <a rel=\"nofollow\" href=\"https:\/\/cts.businesswire.com\/ct\/CT?id=smartlink&amp;url=http%3A%2F%2Fwww.ambest.com%2F&amp;esheet=52332710&amp;newsitemid=20201119006237&amp;lan=en-US&amp;anchor=www.ambest.com&amp;index=4&amp;md5=8024da944360514a6cc607950546d0df\">www.ambest.com<\/a>.<\/b><\/p>\n<p class=\"bwalignc\"><b>Copyright \u00a9 2020 by A.M. Best Rating Services, Inc. and\/or its affiliates. ALL RIGHTS RESERVED.<\/b><\/p>\n<p><img decoding=\"async\" alt=\"\" src=\"https:\/\/cts.businesswire.com\/ct\/CT?id=bwnews&amp;sty=20201119006237r1&amp;sid=flmnd&amp;distro=nx&amp;lang=en\" style=\"width:0;height:0\" \/><span class=\"bwct31415\" \/><\/p>\n<p id=\"mmgallerylink\"><span id=\"mmgallerylink-phrase\">View source version on businesswire.com: <\/span><span id=\"mmgallerylink-link\"><a href=\"https:\/\/www.businesswire.com\/news\/home\/20201119006237\/en\/\" rel=\"nofollow\">https:\/\/www.businesswire.com\/news\/home\/20201119006237\/en\/<\/a><\/span><\/p>\n<p><b>Darian Ryan, CPA<br \/>\n<br \/>Senior Financial Analyst<br \/>\n<br \/>+1 908 439 2200, ext. 5449<br \/>\n<br \/><\/b><a rel=\"nofollow\" href=\"mailto:darian.ryan@ambest.com\">darian.ryan@ambest.com<\/a><\/p>\n<p><b>Steven M. Chirico, CPA<br \/>\n<br \/>Director<br \/>\n<br \/>+1 908 439 2200, ext. 5087<br \/>\n<br \/><\/b><a rel=\"nofollow\" href=\"mailto:steven.chirico@ambest.com\">steven.chirico@ambest.com<\/a><\/p>\n<p><b>Christopher Sharkey<br \/>\n<br \/>Manager, Public Relations<br \/>\n<br \/>+1 908 439 2200, ext. 5159<br \/>\n<br \/><\/b><a rel=\"nofollow\" href=\"mailto:christopher.sharkey@ambest.com\">christopher.sharkey@ambest.com<\/a><\/p>\n<p><b>Jim Peavy<br \/>\n<br \/>Director, Communications<br \/>\n<br \/>+1 908 439 2200, ext. 5644<br \/>\n<br \/><\/b><a rel=\"nofollow\" href=\"mailto:james.peavy@ambest.com\"><span style=\"font-weight:normal\">james.peavy@ambest.com<\/span><\/a><\/p>\n<p><b>KEYWORDS:<\/b> Europe<\/p>\n<p><b>INDUSTRY KEYWORDS:<\/b> Banking Professional Services Insurance Finance<\/p>\n<p><b>MEDIA:<\/b><\/p>\n<table cellpadding=\"3\" cellspacing=\"3\">\n<tr>\n<td><font face=\"Arial\" size=\"2\"><b>Logo<\/b><\/font><\/td>\n<\/tr>\n<tr>\n<td><img decoding=\"async\" src=\"https:\/\/mms.businesswire.com\/media\/20201119006237\/en\/828829\/3\/AM_Best_Logo.jpg\" alt=\"Logo\" \/><\/td>\n<\/tr>\n<tr>\n<td><font face=\"Arial\" size=\"2\"><\/font><\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries OLDWICK, N.J.&#8211;(BUSINESS WIRE)&#8211;AM Best has maintained the under review with negative implications status for the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of \u201ca-\u201d of Watford Re Ltd. (Watford Re) (Bermuda) and its subsidiaries, Watford Insurance Company Europe Limited (WICE) (Gibraltar), Watford Insurance Company (WIC) (New Jersey) and Watford Specialty Insurance Company (WSIC) (New Jersey). In addition, AM Best has maintained the under review with negative implications status for the Long-Term ICR of \u201cbbb-\u201d and the Long-Term Issue Credit Rating of \u201cbb\u201d on the $225 million ($52 million outstanding) 8.5% cumulative preference shares of &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/www.marketnewsdesk.com\/index.php\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries&#8221;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-385505","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries - Market Newsdesk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.marketnewsdesk.com\/index.php\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries - Market Newsdesk\" \/>\n<meta property=\"og:description\" content=\"AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries OLDWICK, N.J.&#8211;(BUSINESS WIRE)&#8211;AM Best has maintained the under review with negative implications status for the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of \u201ca-\u201d of Watford Re Ltd. (Watford Re) (Bermuda) and its subsidiaries, Watford Insurance Company Europe Limited (WICE) (Gibraltar), Watford Insurance Company (WIC) (New Jersey) and Watford Specialty Insurance Company (WSIC) (New Jersey). In addition, AM Best has maintained the under review with negative implications status for the Long-Term ICR of \u201cbbb-\u201d and the Long-Term Issue Credit Rating of \u201cbb\u201d on the $225 million ($52 million outstanding) 8.5% cumulative preference shares of &hellip; Continue reading &quot;AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries&quot;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.marketnewsdesk.com\/index.php\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\/\" \/>\n<meta property=\"og:site_name\" content=\"Market Newsdesk\" \/>\n<meta property=\"article:published_time\" content=\"2020-11-19T20:29:18+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cts.businesswire.com\/ct\/CT?id=bwnews&amp;sty=20201119006237r1&amp;sid=flmnd&amp;distro=nx&amp;lang=en\" \/>\n<meta name=\"author\" content=\"Newsdesk\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Newsdesk\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\\\/\"},\"author\":{\"name\":\"Newsdesk\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/#\\\/schema\\\/person\\\/482f27a394d4fda80ecb5499e519d979\"},\"headline\":\"AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries\",\"datePublished\":\"2020-11-19T20:29:18+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\\\/\"},\"wordCount\":857,\"image\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/cts.businesswire.com\\\/ct\\\/CT?id=bwnews&amp;sty=20201119006237r1&amp;sid=flmnd&amp;distro=nx&amp;lang=en\",\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\\\/\",\"url\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\\\/\",\"name\":\"AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries - 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(Watford Re) (Bermuda) and its subsidiaries, Watford Insurance Company Europe Limited (WICE) (Gibraltar), Watford Insurance Company (WIC) (New Jersey) and Watford Specialty Insurance Company (WSIC) (New Jersey). In addition, AM Best has maintained the under review with negative implications status for the Long-Term ICR of \u201cbbb-\u201d and the Long-Term Issue Credit Rating of \u201cbb\u201d on the $225 million ($52 million outstanding) 8.5% cumulative preference shares of &hellip; Continue reading \"AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries\"","og_url":"https:\/\/www.marketnewsdesk.com\/index.php\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\/","og_site_name":"Market Newsdesk","article_published_time":"2020-11-19T20:29:18+00:00","og_image":[{"url":"https:\/\/cts.businesswire.com\/ct\/CT?id=bwnews&amp;sty=20201119006237r1&amp;sid=flmnd&amp;distro=nx&amp;lang=en","type":"","width":"","height":""}],"author":"Newsdesk","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Newsdesk","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.marketnewsdesk.com\/index.php\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\/#article","isPartOf":{"@id":"https:\/\/www.marketnewsdesk.com\/index.php\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\/"},"author":{"name":"Newsdesk","@id":"https:\/\/www.marketnewsdesk.com\/#\/schema\/person\/482f27a394d4fda80ecb5499e519d979"},"headline":"AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries","datePublished":"2020-11-19T20:29:18+00:00","mainEntityOfPage":{"@id":"https:\/\/www.marketnewsdesk.com\/index.php\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\/"},"wordCount":857,"image":{"@id":"https:\/\/www.marketnewsdesk.com\/index.php\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\/#primaryimage"},"thumbnailUrl":"https:\/\/cts.businesswire.com\/ct\/CT?id=bwnews&amp;sty=20201119006237r1&amp;sid=flmnd&amp;distro=nx&amp;lang=en","inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.marketnewsdesk.com\/index.php\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\/","url":"https:\/\/www.marketnewsdesk.com\/index.php\/am-best-maintains-under-review-with-negative-implications-status-for-credit-ratings-of-watford-re-ltd-and-its-subsidiaries\/","name":"AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries - 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