S&P Global Ratings on Oct. 5 placed the ratings ofAsia Capital Reinsurance GroupPte. Ltd. on CreditWatch with negative implications.
The ratings placed under CreditWatch are the reinsurer's A- long-termlocal currency insurer financial strength and issuer credit ratings, as well asits "axAA" long-term ASEAN regional scale rating.
The action follows the major shareholders of Asia CapitalReinsurance's holding company, ACR Capital Holdings Pte. Ltd., to the takeover of thereinsurer by Shenzhen Qianhai Financial Holdings Co. Ltd. and ShenzhenInvestment Holdings Co. Ltd.
The rating agency said the new ownership could alter AsiaCapital Reinsurance's business or investment strategy or capital managementpolicy in a way that could weaken its credit profile.
S&P expects to resolve the CreditWatch placement in thenext 90 days after discussions with the new shareholders. The ratings could bedowngraded if the company's capital base weakens significantly, if itsunderwriting or investment portfolio changes or if the company shifts itsbusiness mix to lines or regions in which it does not have expertise.
The ratings could be affirmed and removed from CreditWatchif the new shareholders exhibit a willingness to maintain the reinsurer'scapital adequacy and allow the group the autonomy to manage its business.
S&P Global Ratings andS&P Global Market Intelligence are owned by S&P Global Inc.