AM Best Places Credit Ratings of Axéria Prévoyance and Axeria Re Limited Under Review With Developing Implications

LONDON–(BUSINESS WIRE)–AM Best has placed under review with developing implications the
Financial Strength Ratings of A- (Excellent) and the Long-Term Issuer
Credit Ratings of “a-” of Axéria Prévoyance (Axéria) (France) and Axeria
Re Limited (Axeria Re) (Malta).

These Credit Rating (rating) actions follow April S.A.’s (April)
announcement on 29 December 2018 that its majority shareholder, SAS
Evolem, had entered into exclusive negotiations with CVC Capital
Partners (CVC), to acquire SAS Evolem’s equity holding in April, the
listed holding company of the April group and intermediate parent
company of Axéria and Axeria Re.

Under the terms of the agreement, CVC would acquire SAS Evolem’s 65.1%
equity stake in April at a price of EUR 22 per share, subject to any
cost adjustment (or best estimate thereof) arising from any dividend
distribution to occur and from a proposed tax reassessment notified by
the French tax authorities concerning the territoriality of the
reinsurance business conducted by Axeria Re, which was announced on 24
December 2018. Upon completion of the acquisition of SAS Evolem’s
majority stake in the April group, it is expected that CVC will make a
public tender offer for the remainder of April’s share capital, at the
same price as that paid to SAS Evolem.

A definitive agreement for the acquisition of SAS Evolem’s stake in
April could be entered into upon completion of the relevant legal
procedures concerning employment regulations in France. The completion
of the transaction also is subject to regulatory approval, with closing
expected during the second quarter of 2019.

These ratings have been placed under review with developing
implications, as AM Best needs to assess the impact of the planned
change in ownership on the balance sheet strength, operating
performance, business profile and ERM assessments of Axéria and Axeria
Re, as well as the impact on the April group’s operations and future
strategy. AM Best will conduct detailed discussions with the April group
and its rated entities to assess the impact of the planned transaction
on their rating fundamentals. AM Best expects the ratings to remain
under review pending the completion of the transaction.

The rating action for Axeria Re also reflects uncertainty arising from
the aforementioned tax reassessment by the French tax authorities. AM
Best will continue to monitor developments to assess the impact of any
penalty incurred on Axeria Re’s credit fundamentals. Furthermore, AM
Best expects that the April group would provide prompt and sufficient
support to Axeria Re should it be required.

This press release relates to Credit Ratings that have been published
on AM 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 AM Best’s
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best’s Credit Ratings
. For information on the proper media
use of Best’s Credit Ratings and AM Best press releases, please view
Guide
for Media – Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases
.

AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information
.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

Contacts

Alex Rafferty, ACA
Senior Financial Analyst
+44
20 7397 0285

alex.rafferty@ambest.com

Ghislain Le Cam, CFA, FRM
Director, Analytics
+44
20 7397 0268

ghislain.lecam@ambest.com

Christopher Sharkey
Manager, Public Relations
+1
908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908
439 2200, ext. 5644

james.peavy@ambest.com