Fitch rates Enstar Finance notes BB+

Fitch Ratings said it assigned a BB+ rating to the upcoming $500 million offering of 5½% fixed-rate reset junior subordinated notes due 2042 by Enstar Finance LLC, a wholly owned subsidiary of Enstar Group Ltd.

Enstar Group, rated BBB, will guarantee the notes on a junior subordinated basis. The new issuance ranks equally with Enstar Finance's other junior subordinated notes and is thus rated equivalently, the agency said.

“Fitch considers the junior subordinated notes to have ‘minimal’ nonperformance risk with notching set two below the Enstar Group IDR based on 'poor' recovery expectations, with no additional notching for nonperformance,” the agency said in a press release.

The company intends to use the proceeds to repay at maturity the outstanding $280 million of Enstar Group 4.5% senior notes due March 2022, with any remaining proceeds for general corporate purposes, including, but not limited to, funding for acquisitions, working capital and other business opportunities.

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