AM Best Comments on Credit Ratings of Peak Reinsurance Company Limited Following Disclosure on Securities Issuance
AM Best has commented that the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of a- of Peak Reinsurance Company Limited (Peak Re) (Hong Kong) and its subsidiary, Peak Reinsurance AG (Switzerland), remain unchanged following the disclosure of an issuance of perpetual subordinated guaranteed capital securities (securities).
AM Best has commented that the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” of Peak Reinsurance Company Limited (Peak Re) (Hong Kong) and its subsidiary, Peak Reinsurance AG (Switzerland), remain unchanged following the disclosure of an issuance of perpetual subordinated guaranteed capital securities (securities).
These securities will be issued by Peak Re (BVI) Holding Limited and be unconditionally and irrevocably guaranteed on a subordinated basis by Peak Re. The target amount to be raised from the issuance is approximately USD 250 million. Distributions are payable semi-annually at a rate of 5.35% per annum and the securities are non-callable within the first five years.
AM Best currently categorises Peak Re’s balance sheet strength as very strong. The company’s capital and surplus has grown at a compound average growth rate of 9.7% during the five-year period from 2015 to 2019, driven by capital injections from Peak Re’s shareholders and full earnings retention during the period. AM Best views the issuance to further strengthen Peak Re’s risk-adjusted capitalisation over the intermediate term and at the current rating level. It also demonstrates Peak Re’s improved level of financial flexibility and ability to access diversified capital resources. Given the expanded balance sheet, AM Best expects the company to continue to uphold a prudent approach toward business expansion, asset allocation and risk selection.
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