S&P puts SCOR's Brazilian operations on 'CreditWatch Negative'

S&P Global Ratings placed its 'BBB+' financial strength rating on Brazil-based reinsurer SCOR Brasil Resseguros on CreditWatch with negative implications.

This action follows S&P’s placement of its 'BB' long-term foreign and local currency sovereign credit ratings on the Federative Republic of Brazil on CreditWatch negative on May 22, the ratings agency said.

The financial strength rating on SCOR Brasil benefits from a qualifying guarantee from its ultimate parent, SCOR SE (AA-/Stable). If S&P’s rating on a sovereign is speculative grade, the ratings on guaranteed entities domiciled in that country may be up to four notches above the local currency sovereign rating.

“We aim to resolve the CreditWatch placement within the next three months,” S&P said in a statement.

The agency could affirm the ratings on SCOR Brasil if it were to take a similar rating action on Brazil. Similarly, if S&P were to lower the ratings on Brazil any further, the agency would downgrade SCOR Brasil by the same number of notches.

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