… as S&P lowers its credit rating
Standard & Poor’s (S&P) has scaled back its long-term credit rating on Swiss Re from AA- to A+ after the reinsurance giant leaked capital throughout last year.
S&P credit analyst Peter Grant says the credit ratings agency acted in response to Swiss Re’s “much greater than anticipated” capital depletion during 2008 which has resulted in capital-raising initiatives.
Mr Grant says S&P identified “potential adverse flow-on effects, particularly on the group’s future earnings and financial flexibility”.
Earlier this month Swiss Re moved to shore up capital through a CHF3 billion ($3.98 billion) convertible bond issue to US insurance giant Berkshire Hathaway.
The three-year convertible notes could see the company owned by investment guru Warren Buffett raise its stake in Swiss Re from about 3% to more than 20%.
S&P says Swiss Re’s initiatives to restore capital adequacy could soon restore the double-A rating.
S&P credit analyst Peter Grant says the credit ratings agency acted in response to Swiss Re’s “much greater than anticipated” capital depletion during 2008 which has resulted in capital-raising initiatives.
Mr Grant says S&P identified “potential adverse flow-on effects, particularly on the group’s future earnings and financial flexibility”.
Earlier this month Swiss Re moved to shore up capital through a CHF3 billion ($3.98 billion) convertible bond issue to US insurance giant Berkshire Hathaway.
The three-year convertible notes could see the company owned by investment guru Warren Buffett raise its stake in Swiss Re from about 3% to more than 20%.
S&P says Swiss Re’s initiatives to restore capital adequacy could soon restore the double-A rating.