OLDWICK, N.J., Sep 26, 2008 (BUSINESS WIRE) -- FRE | Quote | Chart | News | PowerRating -- A.M. Best Co. has downgraded the financial strength rating (FSR) to B++ (Good) from A- (Excellent) and issuer credit rating (ICR) to "bbb" from "a-" of Shenandoah Life Insurance Company (Shenandoah Life) (Roanoke, VA). The outlook for both ratings is being revised to negative from stable.
The rating downgrades are based on the significant exposure Shenandoah Life has to Freddie Mac and Fannie Mae perpetual preferred stock and the expected reduction in the company's capital and surplus reflecting anticipated write-downs based on current low valuations. Furthermore, A.M. Best notes that Shenandoah Life continues to maintain a relatively high exposure to commercial mortgages, collateralized debt obligations, other structured securities and borrowing under the Federal Home Loan Bank program. Shenandoah Life also has experienced rapid growth in certain business lines. The Best's Capital Adequacy Ratio is expected to fall below the required level for an Excellent rating following the expected write-downs.
Shenandoah Life's ratings continue to recognize its positive net gains from operations, diversified business profile and continuing new premium growth from product offerings to the senior market through a strong relationship with independent marketing organizations.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best
FRE A.M. Best Downgrades Ratings of Shenandoah Life Insurance Company
The rating downgrades are based on the significant exposure Shenandoah Life has to Freddie Mac and Fannie Mae perpetual preferred stock and the expected reduction in the company's capital and surplus reflecting anticipated write-downs based on current low valuations. Furthermore, A.M. Best notes that Shenandoah Life continues to maintain a relatively high exposure to commercial mortgages, collateralized debt obligations, other structured securities and borrowing under the Federal Home Loan Bank program. Shenandoah Life also has experienced rapid growth in certain business lines. The Best's Capital Adequacy Ratio is expected to fall below the required level for an Excellent rating following the expected write-downs.
Shenandoah Life's ratings continue to recognize its positive net gains from operations, diversified business profile and continuing new premium growth from product offerings to the senior market through a strong relationship with independent marketing organizations.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best
FRE A.M. Best Downgrades Ratings of Shenandoah Life Insurance Company
