S&P: American Steamship Owners Mutual P&I Assoc. Inc. 'BBB-' Ratings Affirmed; Outlook Stable
We project the Club's capital adequacy through 2018 to be at the upper adequate level in our base-case scenario. This is an improvement from last year due to the issuance of a $19.5 million surplus note in December 2015. We view the note as having intermediate equity content. It is owned entirely by board members.
Offsetting the improvement in the capital and earnings score was a change in the financial flexibility score to less than adequate. The driver of this change was the negative score for fixed-charge coverage ratio. Although the company reported an improvement in earnings in 2015, we expect the fixed-charge coverage ratio to remain below 4.0x. Management has taken steps to diversify the Club's business and improve its operating performance, which should improve the fixed
We regard the Club's financial risk profile as less than adequate due to its upper adequate capital and earnings, its moderate risk position, and lower adequate financial flexibility. We view the Club's business risk profile as satisfactory, reflecting its adequate competitive position that stems from its weak operating performance and relatively small premium base.
The stable outlook reflects our view that the Club's capital adequacy will remain at least at an upper adequate level through 2018 and that its operating performance, while somewhat improving, will remain weak and a drag on the ratings.
We might lower the ratings if the Club's capital adequacy falls below less than adequate or its competitive position becomes weaker than adequate.
We are unlikely to raise our rating in the next two years. Any upgrade would depend on a significant and sustainable improvement in the Club's operating performance.
-charge coverage ratio. It is too soon, however, to judge the success of these initiatives and the sustainable effect on the operating performance of the Club.
Комментарии