Nov 7 - Standard & Poor's Ratings Services said today it assigned its 'BBB-'
rating to OneBeacon U.S. Holdings, Inc. (OBH; BBB-/Stable/--) offering of $275
million of 4.6% senior unsecured notes due 2022. The senior notes will be
guaranteed by OneBeacon Insurance Group Ltd. (NYSE:OB; BBB-/Stable/--),
indirect parent of OBH. The existing ratings on OB and OBH remain unchanged.
We understand the company will use the proceeds to redeem all of OBH's
outstanding 5.875% $270 million senior unsecured notes due May 2013. On a pro
forma adjusted basis, based on the financials as of third-quarter 2012 (ended
Sept. 30), OB's consolidated debt leverage is expected to be in line with the
current leverage. The debt leverage as of Sept. 30, 2012 was about 21%.
Furthermore, the company's interest coverage ratio is likely to improve due to
the lower expected coupon on the new debt. We expect the pro forma debt
leverage and coverage ratios to remain supportive of the current ratings.
RELATED CRITERIA AND RESEARCH
Holding Company Analysis, June 11, 2009
OneBeacon U.S. Holdings Inc.
Counterparty credit rating BBB-/Stable/--
Senior unsecured BBB-
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