Fitch puts Sirius International on watch

Fitch Ratings said it placed Sirius International Group, Ltd.'s ratings on Rating Watch negative, including its BBB long-term issuer default rating and BBB- senior debt rating.

Sirius International Group is a holding company subsidiary of Sirius International Insurance Group, Ltd., collectively known as Sirius.

The negative watch reflects near term uncertainty related to the deepening debt and liquidity crisis at China Minsheng Investment Group Corp., Ltd., which ultimately owns about 80% of Sirius's common shares on a fully diluted economic basis, Fitch said.

Importantly, defaults by China Mengshen do not trigger any default provisions under Sirius's credit facilities or bonds, the agency noted.

Fitch said it views Sirius's structural safeguards as primarily insulating the company from China Minsheng's liquidity issues, although its corporate governance protections have not been tested under such a high stress event.

The larger concern surrounds the negative implications to Sirius's competitive market position from being owned by a severely strained majority shareholder, with future ownership uncertain given the substantial doubt about China Minsheng's ability to continue as a going concern, Fitch said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.