Insurance company AXIS ratings unchanged following its purchase of rival company
Moody’s has affirmed the ratings of AXIS Capital following the announcement from the insurance company to purchase Novae Group and its associates for $604m (€529m).
The ratings outlook for AXIS is stable, Moody's said.
Earlier this week AXIS confirmed that it was to buy Novae for £7.00 (€7.94) per share, with the purchase price representing approximately 20pc premium to Novae's closing price on 4 July 2017.
The deal will consist of cash, however AXIS, a global insurer and reinsurer, has indicated that the company may consider partial debt financing if conditions prove favourable for such a move.
The deal is expected to conclude late in 2017, subject to various regulatory approvals.
In affirming the rating, Moody’s said that the proposed acquisition of Novae had a number of strategic benefits for AXIS, including the increased improvement of its presence in the Lloyds insurance market in London.
The acquisition of Novae, which has established a presence in speciality lines of business including marine hull and liability, and cyber liability, is expected to boost AXIS bottom line, however it will also increase the level of high catastrophe risk which AXIS takes on.