Canadian Underwriter

Standard & Poor’s drops St. Paul Cos. financial rating

July 25, 2002   by Canadian Underwriter

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Rating agency Standard & Poor’s has reduced the financial rating of the St. Paul Cos. Group from "A-minus" to "B-plus", primarily due to a large settlement cost recently reported for asbestosis and environmental-related claims. The group was placed on "credit watch" by the rating agency on May 16 of this year. "The outlook on all of these companies is negativebecause of the uncertainty associated with St. Paul’s determination to seek more aggressive early resolution of certain pending asbestos and environmental-related litigation."
St. Paul reported a second-quarter net loss for this year of US$223 million. The company’s drop into the red largely resulted from a US$380 million allocation for settlement of asbestos/environmental claims. Standard & Poor’s says that the level of capital within the group is inadequate to hold a "A" rating.

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