FFH: Outlook Positive, says S&P

Standard & Poor’s has announced:

  • •Fairfax Financial Holdings Ltd. and its subsidiaries’ (collectively, FFH)
    operating earnings outlook is improving as the company redeploys its substantial cash and short-term holdings.

  • •Our view of its competitive position has strengthened in the past few years due to the addition of strong operating assets that complement FFH’s insurance platform.
  • •We are revising our outlook on FFH to positive from stable, and affirming all of our ratings.
  • •The positive outlook means that we could upgrade FFH by one notch during the next 24 months if the group improves its fixed charge coverage, supported by a stable-to-declining trend in financial leverage, and maintains very strong capitalization redundant at the ‘AA’ level.

The positive outlook reflects the expansion of operating earnings primarily driven by an increase in investment earnings that should lead to steady improvement in debt serviceability and support prospective capitalization in the next two-to-three years. In addition, we expect FFH to build on its competitive position, leveraging further the strength of its combined insurance operating platform. We also expect group enterprise risk management (ERM) practices to continue to develop reflective of a large and complex organization.

Affected issues are FFH.PR.C, FFH.PR.D, FFH.PR.E, FFH.PR.F, FFH.PR.G, FFH.PR.H, FFH.PR.I, FFH.PR.J, FFH.PR.K and FFH.PR.M.

Leave a Reply

You must be logged in to post a comment.