(The following statement was released by the rating agency)
Oct 11 - Standard & Poor's Ratings Services said today that it has assigned its 'BBB-' global scale ratings to Toronto-based Fairfax Financial Holdings Ltd.'s (Fairfax) pending issuance of up to C$200 million in 10-year fixed-rate senior unsecured debt.
Fairfax intends to issue the senior notes from its current $2 billion universal shelf filing. We believe the company will use the proceeds to pay down outstanding debt of similar amount. We do not expect this issuance to have any major impact on financial leverage and coverage ratios. On a pro forma basis, as of June 30, 2012, Fairfax's total financial leverage was about 31%, which is in line within our expectations.
In the first six months of 2012, Fairfax reported a pretax operating gain of $186 million as compared with a loss of $242 million in the same period in 2011, largely as a result of a substantial reduction of catastrophe losses. Its combined ratio through the first six months of 2012 for ongoing operations was 98.1%, which includes three percentage points of catastrophe losses, versus 114.2% in the same period in 2011, which included 19.5 percentage points in catastrophe losses.
RELATED CRITERIA AND RESEARCH Holding Company Analysis, June 11, 2009
Fairfax Financial Holdings Ltd. Issuer Credit Rating BBB-/Positive NEW RATING
Fairfax Financial Holdings Ltd.
Senior unsec notes due 2022 BBB-
(Caryn Trokie, New York Ratings Unit)