Converium upgraded to A-Posted On: Mar. 1, 2007 12:00 AM CST
ZUG, SwitzerlandStandard & Poor's Corp. has upgraded its financial strength rating on Converium Holding Ltd. to A- from BBB+.
Zug, Switzerland-based Converium, recently the subject of an unsolicited takeover bid from Paris-based rival SCOR S.A., said that regaining an A-rating marked "the full completion of Converium's turnaround."
S&P said in a statement that the upgrade reflected the belief that Converium will settle with regulators in the United States over the restatement of certain financial reinsurance transactions.
S&P said this followed an independent study commissioned by Converium of recent settlements with the Securities and Exchange Commission.
The rating agency said that although the cost of a settlement between Converium and the SEC is not yet certain, it believed the reinsurer's capital adequacy likely will remain consistent with an A- rating, even if it is in excess of the upper limit of settlement amounts revealed by the study.
S&P said the rating had a stable outlook, reflecting the fact that it expects Converium's combined ratio to be less than 100% for 2007.
While a revision of that outlook is unlikely in the medium term, according to S&P, it could be revised to negative if SCOR is successful in its takeover bid and key European clients or staff leave Converium as a result, among other things.