(The following statement was released by the rating agency)
LONDON, August 06 (Fitch) Fitch Ratings has assigned Admiral
holding company Issuer Default Rating (IDR) of A-/Stable) issue
debt securities of GBP200m a 'BBB-' final rating. The notes are
notches below Admiral's IDR of 'A-' to reflect their
subordination and loss
absorption features, in line with Fitch's notching criteria.
The assignment of the final rating follows the completion of the
and receipt of documents conforming to the information
previously received. The
final rating is the same as the expected rating Fitch assigned
on 20 June 2014.
KEY RATING DRIVERS
The securities have a 10-year bullet maturity and pay a 5.5%
semi-annually. The scheduled maturity date is 25 July 2024. The
interest deferral features which are triggered if regulatory
solvency is at
Following the bond issuance, Admiral's Fitch-calculated
leverage based on FY13 numbers is 27.6%, in line with Fitch's
companies rated in the 'A' category. Fixed-charge coverage is
expected to be
solid given Admiral's strong track record of earnings
The subordinated bond has been structured to qualify as Lower
Tier 2 capital
under current UK regulations and to count as Tier 2 capital
under Solvency II.
According to Fitch's methodology, this subordinated bond is
classified as 100%
capital within Fitch's own capital assessment and is classified
as 100% debt for
the agency's financial leverage calculations.
An upgrade is unlikely in the medium term given Admiral's
profile and limited geographical diversification.
A downgrade could be triggered by a substantial erosion of
to a sustained increase in net underwriting leverage
(premiums/equity) to 1.5x
(2013: 0.9x). A marked deterioration in technical and/or overall
particularly compared with peers, could also result in a
A downgrade may also result from a loss of its co-insurance
in an immediate and significant increase in capital requirements
significant falls in business volumes.
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London E14 5GN
+44 20 3530 1211
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Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153,
Additional information is available at www.fitchratings.com.
Applicable criteria, 'Insurance Rating Methodology', dated 13
November 2013 are
available at www.fitchratings.com.
Applicable Criteria and Related Research:
Insurance Rating Methodology
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