A.M. Best Co. has assigned a debt rating of “bbb-” to the issuance of $152.5 million 7.75% senior unsecured notes due December 2043 to be issued by Maiden Holdings North America Ltd. (Maiden NA) (Delaware), a direct, wholly owned subsidiary of Maiden Holdings, Ltd (Maiden Holdings) (Hamilton, Bermuda) (NASDAQ:MHLD). The outlook assigned is stable. These senior notes are fully and unconditionally guaranteed by Maiden Holdings. All remaining ratings of Maiden and its subsidiaries are unchanged. (For further information, please see A.M. Best’s press release dated May 24, 2013.)
The proceeds from the issuance will be used to redeem Maiden Holdings’ outstanding trust preferreds. With the issuance of these senior notes, Maiden Holdings’ unadjusted debt-to-total capital and adjusted debt-to-total capital will temporarily increase to 45.1% and 31.9%, respectively, but will decline after Maiden Holdings pays down the trust preferred shares in January 2014. Recently, these measures have trend higher; however, they are within A.M. Best’s guidelines for the current rating level and will begin to decline in 2014. In addition, Maiden Holdings’ interest coverage ratio is expected to remain adequate for the assigned rating.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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