Fitch Ratings has placed some of Brit plc’s ratings on Rating Watch Negative following an announcement that Fairfax Financial Holdings intends to acquire Brit for roughly $1.9 billion.
The ratings being put on watch are the long-term issuer default Rating (IDR) of ‘BBB+’ and a ‘BB+’ rating on subordinated notes issued by Brit.
Fitch has not maintained a rating on Fairfax since November 2013, and the rating action reflects Fitch’s uncertainty about whether ownership by Fairfax will constrain Brit’s ratings.
In resolving the rating watch on Brit, Fitch will seek to update its view on Fairfax and assess the implications of the proposed deal for Brit’s capital management. Fitch said its analysts will also assess the impact of any potential changes in Brit’s investment strategy, as well as the perceived strategic importance of Brit to Fairfax.
Source: Fitch Ratings