AM Best has placed under review the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of "a-" of Singapore Reinsurance Corporation Limited (Singapore Re) with developing implications, as it assesses the impact of an expected change in ownership on Singapore Re's credit fundamentals.
This follows a voluntary cash offer dispatched by Fairfax Asia Limited (Fairfax Asia) to purchase all issued and paid-up ordinary shares in the capital of Singapore Re, other than those already held by Fairfax Asia and other Fairfax Financial Holdings Limited (Fairfax group) companies.
Fairfax Asia has tabled an offer price of S$0.3535 (26 US cents) a share, conditional on the offerer garnering a stake of more than 50%
With the minimum acceptance condition for the takeover of Singapore Re having been satisfied, AM Best expects the transaction to proceed, subject to closing requirements.
“AM Best will need to consider the planned integration of Singapore Re within the Fairfax group, any expected changes in strategy and any implicit or explicit support to be provided by the Fairfax group.
“The ratings will remain under review pending completion of the transaction and until AM Best can fully assess the impact of the change in ownership,” the rating agency said in a statement.