American Republic Insurance surplus notes receive AM Best bbb rating
Wellabe’s lead insurance subsidiary has secured a new issue credit rating for its $95 million surplus notes as the group funds growth and capital management plans. The 8.25% notes due 2041 carry a stable outlook, while the additional capital is expected to support expansion in Medicare Supplemental business.
Highlights
- AM Best assigned a bbb Long-Term Issue Credit Rating with a stable outlook to American Republic Insurance Company's $95 million, 8.25% surplus notes due 2041.
- Net proceeds from the debt issuance will support new business growth and capital management, with Wellabe's financial leverage remaining below 20%.
- Wellabe maintains the strongest capitalization under BCAR as it expands Medicare Supplemental business, despite operating pressure from new business strain.
Debt issuance supports growth strategy
As reported by AM Best, American Republic Insurance Company has received a Long-Term Issue Credit Rating of “bbb” for its recently issued $95 million, 8.25% surplus notes due 2041. The rating agency says the outlook on the issue credit rating is stable.The net proceeds from the offering are expected to be used for general corporate purposes, including support for new business growth and capital management. After the debt issuance, financial leverage at Wellabe is expected to remain below 20%.
Capital position backs Medicare expansion
Wellabe is strategically expanding its Medicare Supplemental business and is generating solid top-line growth. At the same time, operating results are under pressure from new business strain, a factor AM Best says will continue until that business matures.Capitalization remains at the strongest level under AM Best’s Best Capital Adequacy Ratio, or BCAR, measure. AM Best says the surplus notes continue to support risk-adjusted capital until operating results improve.
We previously reported on Excel Force MSC Bhd’s plan to raise up to RM10.66 million through a new share issuance as its cash position weakened, with part of the proceeds earmarked to fund ongoing projects. That update also highlighted how a major shareholder change and board reshuffle can reshape governance dynamics and increase compliance-related risks tied to existing financial obligations.
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