Market Overview

A.M. Best Places Credit Ratings of Maiden Holdings, Ltd. and Subsidiaries Under Review with Negative Implications


A.M. Best has placed the Financial Strength Rating (FSR) of A-
(Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of
"a-" of Maiden Reinsurance, Ltd. (Maiden Re) (Hamilton, Bermuda) and its
affiliate, Maiden Reinsurance North America, Inc. (MRNA) (headquartered
in Mount Laurel, NJ), under review with negative implications following
the announcement that the renewal rights for its U.S. Diversified
business were being sold to Transatlantic Reinsurance Company.
Additionally, A.M. Best has placed under review with negative
implications the Long-Term ICRs of "bbb-" and the associated Long-Term
Issue Credit Ratings (Long-Term IR) of Maiden Holdings, Ltd. (Maiden
Holdings) (Pembroke, Bermuda) and its intermediate subsidiary, Maiden
Holdings North America, Ltd. (Delaware).

The under review with negative implications status reflects uncertainty
regarding potential future transactions and their successful completion;
the as yet-unresolved, previously disclosed, renewal of the reinsurance
agreement with AmTrust Financial Services, Inc. (AmTrust); and the
ultimate performance of the reserves related to business assumed from
AmTrust. The negative implications also reflect the potential impact
that the sale of the U.S. Diversified business will have on the group's
on-going business profile.

The announcement on Aug. 29, 2018, of the renewal rights transaction
also indicated that Maiden Holdings is in advanced discussions to sell
MRNA, in a transaction covering approximately $1.1 billion in loss and
loss-adjustment expense reserves. These actions have evolved from a
strategic review of Maiden's operations announced earlier this year,
which have a goal of strengthening the organization's capital position
and improving operating performance, in part through expense reductions.
On-going business at Maiden will include its AmTrust business, which
accounted for the majority of the enterprise's revenue in 2017, and its
European International Insurance Services and Capital Solutions

A.M. Best anticipates that the reduction in net premiums written
resulting from the renewal rights transaction should drive improvements
in risk-adjusted capitalization, as calculated by Best's Capital
Adequacy Ratio (BCAR). A transaction under which the MRNA legal entity
will be sold also should benefit BCAR, by removing $1.1 billion in
reserves from the enterprise books that have been a source of some
variability in loss reserve development in recent years. The group's
balance sheet strength assessment has benefited historically from its
focus on high-quality investments, a strategy that is not expected to
change. However, other factors that have negatively impacted the balance
sheet strength assessment – including the variability in reserves
associated with the AmTrust business, negative interest coverage in 2017
and expected in 2018 and substantial servicing requirements for its
outstanding securities – remain offsetting considerations.

Improvements to operating performance also are expected as a result of
these actions. In addition to scaling its operations to reflect the
discontinuation of the U.S. Diversified business, which will have
immediate, albeit modest, impact in 2018 and more meaningful benefits in
2019, the U.S. Diversified business historically produced less favorable
results than the AmTrust business. There are a number of issues that
will be resolved in the near term that will provide an additional
perspective on the future operating profitability, such as the
renegotiation of the AmTrust reinsurance treaty and the disposition of

The organization's business profile will contract as a result of these
actions, with the majority of its current business that is not related
to AmTrust being sold. The assessment of business profile reflected, in
part, the niche role the company played as a provider of proportional
reinsurance in the United States. While recognizing the potential
benefits to operating performance over the longer term from
discontinuing this operation, which historically had weaker results, the
diminution of the business profile is a key factor in the under review
with negative implications status.

A.M. Best expects the ratings to remain under review while management's
strategic review and any associated actions are concluded, and A.M. Best
completes its assessment of those actions. A.M. Best will monitor any
interim developments and take any necessary rating action.

The following Long-Term IRs have been placed under review with negative

Maiden Holdings, Ltd.—
--"bbb-" on $110 million 6.625% senior
unsecured notes, due 2046
--"bb" on $165 million 7.125% preferred
non-cumulative stock
--"bb" on $150 million 8.25% preferred stock
on $150 million 6.7% preferred stock

Maiden Holdings North America, Ltd.—
--"bbb-" on $152.5 million
7.75% senior unsecured notes, due 2043

The following indicative Long-Term IRs under the shelf registration have
been placed under review with negative implications:

Maiden Holdings, Ltd.—
--"bbb-" on senior unsecured debt
on subordinated debt
--"bb" on preferred stock

Maiden Holdings North America, Ltd.—
-- "bbb-"on senior unsecured
-- "bb+" on senior subordinated debt
-- "bb" on junior
subordinated debt

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
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
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