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A.M. Best Co. has placed under review with negative implications the financial strength rating (FSR) of B++ (Good) and issuer credit rating (ICR) of “bbb” of
American Federated Insurance Company and the FSR of B+ (Good) and ICR of “bbb-” of its sister company,
American Federated Life Insurance Company (Flowood, MS) (known collectively as American Federated Insurance Companies). The American Federated Insurance Companies are wholly owned subsidiaries of First Tower Corp (First Tower), a multiline specialty finance company.
The rating actions reflect the disclosure of a definitive agreement under which Prospect Capital Corporation (Prospect) (NASDAQ: PSEC) will acquire 80.1% of First Tower, with the remaining 19.9% of the shares being retained by First Tower management. Prospect is a closed-end investment company that lends to and invests in private and microcap public businesses.