S&P: HCC on negative watch

Standard & Poor’s said it placed all of the ratings on HCC Insurance Holdings Inc. and its insurance operating subsidiaries, on CreditWatch with negative implications.

The agency also said it withdrew the ratings on Houston Casualty Company Europe Seguros & Reaseguros SA, as it recently merged with another core subsidiary of HCC.

The CreditWatch placement follows news that Tokio Marine & Nichido Fire Insurance Co. Ltd. has entered into a definitive agreement to acquire HCC in an all-cash transaction, S&P said.

HCC’s current group credit profile is one notch higher than that of Tokio Marine, the agency said.

After the close of the transaction, S&P said it could downgrade HCC by no more than one notch depending on the assessment of its strategic relationship to its new parent.

The agency also said it will review HCC’s future business strategy with regard to how it will operate under the new ownership, including its capital management, investment and growth strategies and the structure of its management and governance after the transaction closes.

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