Moody's rates Kepler loan Ba2

Moody's Investors Service said it assigned a provisional Ba2 rating to the $200 million senior secured term loan facility of Kepler Holdings Ltd.

The outlook is stable.

The privately placed senior secured term loan facility, which is being syndicated to financial institutions and other institutional lenders, is sponsored by Hannover Ruckversicherung AG and its affiliates, E+S Ruckversicherung AG and Hannover Re (Bermuda) Ltd. for natural catastrophe risks. Investors will provide aggregate catastrophe excess of loss reinsurance protection - on an indemnity basis - to Hannover Re for the portion of losses in excess of a stipulated attachment point up to a stipulated exhaustion point.

The agency said the rating for the term loan reflects Moody's analysis of the probability of loss and expected loss to Kepler Holdings' lenders over the two risk periods, Hannover's option to buy reinsurance on its retained share, the risk that reinsurers, including Hannover Re, may relax contract terms and conditions as the market becomes more competitive and the fact that segregated cell technology has never been tested in bankruptcy.

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