777 Re credit ratings withdrawn by AM Best

777 Re credit ratings withdrawn by AM Best | Insurance Business Asia

Reinsurance

777 Re credit ratings withdrawn by AM Best

Final rating updated not completed due to absence of liabilities

Reinsurance

By
Kenneth Araullo

Following a string of troubles, AM Best has withdrawn the financial strength rating of C- (Weak) and the long-term issuer credit rating of “ccc-“ (Weak) of 777 Re Ltd., based in Hamilton, Bermuda. At the time of the withdrawal, these ratings were under review with negative implications.

According to AM Best, a final rating opinion is typically completed alongside a rating withdrawal. However, due to 777 Re’s lack of insurance liabilities and its plans to cease insurance activities, a final rating update was not possible.

It was earlier reported that investment bank Moelis & Co. has been appointed to review the reinsurance backer 777 Partners LLC’s portfolio of football teams, raising questions about the future of the multi-club owner.

New York-based Advantage Capital Holdings LLC, a major lender to 777, has tasked Moelis with evaluating potential options for 777’s football holdings, including possible asset sales, according to sources reported by Bloomberg.

777 Partners is currently attempting to acquire football club Everton FC. However, the deal has encountered difficulties due to financing issues and scrutiny of 777’s business management.

In May, two US insurance firms, Atlantic Coast Life Insurance and Sentinel Security Life Insurance, part of the A-Cap insurance group, initiated legal action against AM Best. They alleged the rating agency had an undue focus on 777 Re.

AM Best had raised concerns about the quality of assets held by the reinsurer, prompting A-Cap to reclaim assets previously ceded to 777 Re through reinsurance transactions. This action was taken following regulatory pressure to reduce their exposure to the investment firm.

Additionally, 777 Partners is facing allegations of fraudulent activity amounting to hundreds of millions of dollars in a lawsuit filed by London-based asset manager Leadenhall Capital and its affiliate Leadenhall Life.

The complaint, filed in a federal court in New York, claims that 777 Partners and its co-founder Josh Wander engaged in fraudulent activities involving assets worth over $350 million that were either non-existent, not owned by Wander’s entities, or previously pledged to another lender.

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