Canadian Underwriter

Kingsway in $150 million credit facility; responds to rating action

March 9, 2004   by Canadian Underwriter

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Insurance giant Kingsway Financial Services says it has entered into a new revolving credit facility with a syndicate of three banks for $150 million. The new facility replaces two existing credit facilities, the company notes.
The banks involved include CIBC, LaSalle National and The Bank of Nova Scotia.
Kingsway has also responded to the recent downgrade of its two Canadian companies Kingsway General and York Fire and Casualty by rating agency A.M. Best. “We are disappointed with the rating action taken by A.M. Best, particularly after the actions taken to reduce claim costs, strengthen reserves and increase premiums,” says Kingsway Financial CEO Bill Star. He goes on to acknowledge the rating agency’s concerns over the auto product in Alberta and Ontario, noting that this situation has caused several insurers to be downgraded by the rater, including some who have only “public data” ratings and do not participate in interactive rating with A.M. Best.
A.M. Best had reduced the financial strength rating of the two companies from “A-” (excellent) to “B++” (very good).

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