A.M. Best Assigns Rating to HCC Insurance Holdings, Inc.'s Issuance of Senior Notes: Financial News

A.M. Best Assigns Rating to HCC Insurance Holdings, Inc.'s Issuance of Senior Notes
Tuesday November 10, 4:40 pm ET

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has assigned a debt rating of “a-” to the new issuance of $300 million 6.3% 10-year senior unsecured notes of HCC Insurance Holdings, Inc. (HCC) (headquartered in Houston, TX) [NYSE: HCC]. The assigned outlook is positive. Proceeds from the current offering will be used to repay outstanding indebtedness under HCC’s revolving loan facility.

At September 30, 2009, HCC’s unadjusted debt to capital stood at 13%, comfortably within the acceptable parameters that A.M. Best has established for companies at a similar rating level. While this figure is expected to temporarily rise to near 20% immediately following the debt issuance, A.M. Best expects HCC’s financial leverage to return to current levels when the net proceeds are used to retire the existing credit facility indebtedness.

Given the strong risk-adjusted capitalization of HCC and its subsidiaries, the solid earnings performance through third quarter 2009 with $269.1 million in net income generated, and the equally favorable earnings outlook, A.M. Best believes HCC is well positioned to achieve its financial objectives in 2009. A.M. Best also expects the company will continue to benefit from maintaining considerable financial flexibility.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.