AM Best comments on Peak Re credit ratings following securities issuance disclosure

KUALA LUMPUR, Oct 22 -- AM Best has commented on 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.

According to a statement by the global credit rating agency, it remains unchanged following 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 is approximately US$250 million. Distributions are payable semi-annually at a rate of 5.35 per cent per annum and the securities are non-callable within the first five years. (US$1 = RM4.144)

Currently, AM Best categorises Peak Re’s balance sheet strength as very strong. The company’s capital and surplus have grown at a compound average growth rate of 9.7 per cent during the five-year period (2015-2019), driven by capital injections from Peak Re’s shareholders and full earnings retention.

AM Best views the issuance to further strengthen Peak Re’s risk-adjusted capitalisation over the intermediate term and at the current rating level.

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.

-- BERNAMA