Content and data provided by various third parties and Fidelity - Terms of Use
Print.Print
Small font size A Larger text size A Largest text size A

AM Best Downgrades and Withdraws Credit Ratings of Custodian and Allied Insurance Limited; Maintains Under Review With Negative Implications Status

BY Business Wire | CORPORATE | 09/04/24 12:29 PM EDT

LONDON--(BUSINESS WIRE)-- AM Best has downgraded the Financial Strength Rating to B- (Fair) from B (Fair) and the Long-Term Issuer Credit Rating to ?bb-? (Fair) from ?bb? (Fair) of Custodian and Allied Insurance Limited (CAIL) (Nigeria). Concurrently, these Credit Ratings (ratings) have been withdrawn as the company has requested to no longer participate in AM Best?s interactive rating process. At the time of the withdrawal, these ratings were under review with negative implications.

The ratings reflect CAIL?s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management. The ratings also consider drag from its parent company, Custodian Investment Plc, which AM Best considers to be of lower credit quality.

The rating downgrades reflect the deterioration in CAIL?s risk-adjusted capitalisation, as measured by Best?s Capital Adequacy Ratio (BCAR), which declined to the very strong level at year-end 2023. Challenging economic conditions in Nigeria, which resulted in the material devaluation of the Nigerian naira in the first half of 2023, increased the company?s asset risk and led to greater issuer concentrations within its fixed-income portfolio.

The ratings maintain their under review with negative implications status due to the uncertainty regarding the magnitude of the impact that further devaluation of the Nigerian naira has had on CAIL?s risk-adjusted capitalisation during the first half of 2024.

This press release relates to Credit Ratings that have been published on AM Best?s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best?s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best?s Credit Ratings. For information on the proper use of Best?s Credit Ratings, Best?s Performance Assessments, Best?s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best?s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright ? 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Source: AM Best

More Fixed Income News

All Fixed Income News

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

© 1998 – 2014 FMR LLC.

All rights reserved.
fir_news_article