A.M. Best Maintains Under Review Status with Negative Implications for Sirius International Group, Ltd. and Its Main Subsidiaries

LONDON–(BUSINESS WIRE)–A.M. Best has maintained the under review status with negative
implications for the Long-Term Issuer Credit Rating (Long-Term ICR) of
“bbb” of Sirius International Group, Ltd. (SIG) (Bermuda). In
addition, A.M. Best has maintained the under review status with negative
implications for the Financial Strength Ratings of A (Excellent) and the
Long-Term ICRs of “a” of SIG’s main subsidiaries: Sirius Bermuda
Insurance Company Ltd.
(Bermuda), Sirius International Insurance
Corporation (publ)
(Sweden), and Sirius America Insurance Company
(New York, NY).

These rating actions follow the announcement on June 25, 2018, that
SIG’s parent, Sirius International Insurance Group, Ltd. (SIIG) and
Easterly Acquisition Corp. (Easterly) have executed a definitive
agreement and plan of merger for a proposed business combination that
would result in SIIG becoming a publicly listed company. In addition,
SIIG has announced that the agreement for it to acquire a controlling
interest in The Phoenix Holdings Ltd. (The Phoenix) (a leading
Israeli composite insurer) will terminate on or prior to July 2, 2018.

These ratings were first placed under review with negative implications
on Nov. 27, 2017, following the announcement of the agreement for SIIG
to acquire a controlling interest in The Phoenix.

The under review with negative implications status has been maintained
as A.M. Best needs time to review the implications of the latest
announcements on the rating fundamentals of SIG and its rated

Under the terms of the transaction between SIIG and Easterly, Easterly
will merge with a wholly owned subsidiary of SIIG. Upon completion of
the merger, Easterly’s common shares will be exchanged for SIIG’s common
shares at a price of 1.05 times SIIG’s pro forma diluted GAAP book value
per share as of June 30, 2018. Once the merger is complete (which is
expected at the end of the third quarter or beginning of the fourth
quarter of 2018), SIIG’s common stock will be traded on the NASDAQ.

Pursuant to the merger, SIIG also intends to execute a private placement
of common shares, which should further dilute the shareholding of SIIG’s
ultimate parent, China Minsheng Investment Group Corp., Ltd.

In A.M. Best’s opinion, the credit profile of CMIG is materially weaker
than that of SIIG, and this could lead over time to a deterioration of
the credit fundamentals of SIIG and its rated subsidiaries. A.M. Best
views the expected listing on the NASDAQ as a positive step toward
diluting CMIG’s influence on SIIG. However, any associated benefits,
primarily in terms of governance, will take time to materialise.

The ratings will remain under review until SIIG is publicly listed and
A.M. Best has completed its review of the impact of recent announcements
on the rating fundamentals of SIG and its subsidiaries.

This press release relates to Credit Ratings that have been published
on A.M. Best’s website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best’s
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best’s Credit Ratings
. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view
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