Majestic credit rating drops

It has changed from B++ (Good) to B (Fair), it was announced on Monday.

Majestic Insurance is the primary insurance subsidiary of Bermuda-based Majestic Capital.

A.M. Best also downgraded the debt ratings to “ccc+” from “b+” on the trust preferred securities of Majestic USA Capital Inc. and Embarcadero Insurance Holdings Inc.

A.M. Best said: “These rating actions follow Majestic Capital’s announcement that Bayside Capital Partners LLC has terminated its previously announced merger agreement.

“The rating actions also recognize Majestic’s continued deterioration in its overall earnings and the material deterioration in the company’s surplus. In addition, these actions reflect A.M. Best’s heightened concerns with Majestic Capital’s ongoing operations following the recent announcement of a potential conservation on its main operating subsidiary, which would be taken in conjunction with its proposed transaction with AmTrust Financial Services Inc.

“A.M. Best will continue to monitor Majestic Capital and its subsidiaries as events develop.”