S&P rates Kepler Holdings loan BB

Standard & Poor's said it assigned its BB preliminary senior secured bank loan rating to Kepler Holdings Ltd.'s proposed $200 million term loan. The rating is subject to final documentation.

Kepler Holdings is a newly formed company set up to enter into a $200 million senior secured credit facility and to subscribe to the shares of Kaith Re's newly formed, segregated account, Kepler Re.

The rating reflects the obligation's very low modeled probability of default and the structural provisions that align the interest between Kepler Re and its agreement with Hannover Re, the agency said. Kepler Re will benefit from the very strong competitive position of Hannover Re. Hannover Re also has an experienced underwriting and modeling team with a long track record in the global reinsurance market, the agency added.

These positive factors are partially offset, however, by Hannover Re's exposure to property catastrophe losses and the high level of modeling risk inherent in forecasting the frequency and severity of natural disasters, S&P said.

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