Fitch: HCC on negative watch

Fitch Ratings said it placed HCC Insurance Holdings, Inc.’s ratings on Rating Watch negative, including its A+ issuer default rating and AA insurer financial strength ratings for HCC’s operating subsidiaries.

The negative watch follows news that Tokio Marine Holdings, Inc. will purchase all outstanding shares of HCC for $7.5 billion, or a 38% premium to the June 9 closing stock price for HCC, Fitch said.

The acquisition will be an all-cash transaction, the agency said.

This transaction further diversifies Tokio Marine’s non-Japan-generated premiums to about 38% of premiums derived outside of Japan on a pro forma basis, Fitch said.

HCC ratings may be constrained by Tokio Marine’s lower ratings, which also are affected by the Japanese sovereign rating of A, the agency said.

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