//BestWire// – AM Best has commented that the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of Peak Reinsurance Company Limited (Peak Re) (Hong Kong) and its subsidiaries, Peak Reinsurance AG (Switzerland) and Peak Reinsurance North America Ltd. (Bermuda), remain unchanged following the announcement that funds managed by KKR & Co. Inc. (KKR) and Quadrantis Capital have entered into definitive agreements to acquire minority stakes in Peak Re via its sole and direct holding company, Peak Reinsurance Holdings Limited (Peak Re Holdings), through the purchase of shares from Fosun International Limited (Fosun) (the transactions).
In connection with the transactions, Fosun has acquired the entire stake of approximately 13.07% in Peak Re Holdings previously held indirectly by Prudential Financial, Inc., which temporarily increases Fosun’s ownership in Peak Re Holdings to close to 100% before the closing of the transactions. The transactions are pending regulatory procedures and other customary closing conditions. Upon completion, Fosun, KKR and Quadrantis Capital are expected to hold approximately 86.71%, 11.27% and 1.80% of Peak Re’s issued share capital, via Peak Re Holdings, respectively.
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. Peak Re may benefit from enhanced financial flexibility, investment expertise and potential business growth opportunities from KKR after the transactions. Quadrantis Capital is a Portuguese investment management firm specialising in private equity and venture capital. Meanwhile, Peak Re has demonstrated a track record of effective mitigation of potential contagion risk stemming from Fosun’s weaker credit fundamentals and is expected to sustain its own financial strength. AM Best expects Peak Re to maintain its existing ring-fencing mechanism and continue to enhance its corporate governance, under the new shareholding structure.
AM Best will monitor the strategic direction of Peak Re and the implications on its credit fundamentals, following the closing of the transactions.
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