S&P rates Affirmative Insurance loan B

Standard & Poor's said it assigned its BB counterparty credit and financial strength ratings to Affirmative Insurance Co. and its subsidiary, Insura Property & Casualty Insurance Co.

At the same time, S&P said it assigned its B counterparty credit rating to Affirmative Insurance Holdings Inc. and assigned its B first-lien term bank loan rating to Affirmative's proposed $200 million term loan facility.

The outlook is stable.

S&P said that the ratings on Affirmative reflects the challenges it faces in an industry that exhibits low barriers to entry and a cyclical nature, for which the company will meet with stronger competition in softer market cycles.

More significantly, the ratings reflect the increased interest expense pending acquisition of USAgencies, the agency noted, adding that partially mitigating the weaknesses is an experienced management team.

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