JRG Re credit ratings withdrawn following Fleming purchase

Credit agency has not presented a final rating opinion

JRG Re credit ratings withdrawn following Fleming purchase


By Kenneth Araullo

AM Best has officially withdrawn its credit ratings from JRG Reinsurance Company (JRG Re) following its sale to Fleming Intermediate Holdings.

Prior to withdrawal, the reinsurance arm had a financial strength rating of B++ (Good) and a Long-Term Issuer Credit Rating of "bbb+" (Good), as confirmed by the rating agency. The ratings were under review with negative implications up to the time of their withdrawal.

The decision to withdraw these ratings comes in the wake of the finalized sale of JRG Re by James River Group to Fleming, marking the end of a period of uncertainty regarding the future of JRG Re.

Typically, AM Best explains that it issues a final rating opinion when withdrawing a rating. In this instance, however, the agency cited the absence of adequate forward-looking financial information as the reason it could not issue a final opinion on JRG Re’s ratings.

This month, after brief negotiations, James River Group finalized the sale of JRG Re to Fleming Intermediate Holdings for $277 million. This follows a legal confrontation that resulted in James River obtaining a preliminary injunction from the New York County Supreme Court, Commercial Division, which compelled Fleming to complete the acquisition by no later than April 16, 2024.

The transaction has been fraught with challenges for James River, impacting its parent company’s credit standing. Additionally, James River reported a substantial net loss of $80.4 million in its fourth-quarter financial results for 2023, which was significantly influenced by this sale.

Before the sale, Fleming reiterated its decision to halt the purchase of JRG Re, with the company calling the situation “not a case of buyer’s remorse.” It has laid out several conditions to push through with the deal, but ultimately relented following the court order from the New York County Supreme Court.

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