Unless you’ve been living under a rock – which could be how it feels these days – you’ll know that The Ardonagh Group has made its move for Bravo Group in an eye-catching acquisition.

Mergers in the insurance industry are commonplace, but it’s bigger-than-usual news when the buyer isn’t even profitable. Actually in the red, Ardonagh suffered £102.7 million and £74 million in full-year losses in 2018 and 2019, respectively.

Ardonagh’s expansion is loan-powered, and you can read about the financing here. This has resulted in credit rating agency Fitch Ratings downgrading the insurance broker’s long-term issuer default rating from ‘B’ to ‘B-’.

Read more: The Ardonagh Group trims full-year loss to £74 million

“The downgrade of Ardonagh follows the total £2 billion refinancing of its debt structure enabling the company to fund the acquisitions of the Bravo Group and the Arachas Group,” noted Fitch Ratings.

“Funds from operations gross leverage is expected to remain above 7.0x for at least three years under our assumptions, above our thresholds for the previous ‘B’ rating.”

Ardonagh, the credit rating agency added, is likely to have good liquidity, given its new revolving credit facility and new delayed draw facilities.

“The ratings of Ardonagh’s existing debt facilities will be withdrawn when they are repaid as part of this refinancing,” said Fitch Ratings.