Converium said it planned to raise $420 million, above its previous estimates of $250 million to $400 million. The reinsurer also said it was not pursuing new reinsurance business in North America. That move may damage the overall Converium AG franchise, Moody's said.
Converium's putting that operation in run-off, combined with the company's lower capital base, led Moody's to cut Converium AG's insurance financial strength ratings to "Baa1," or three steps above junk, from "A2." Moody's cut Converium Reinsurance (North America) Inc.'s insurance financial strength rating from "Ba1," the highest junk rating, from "A2," and said it may cut that ratings further. Moody's cut the senior debt rating for debt assumed by Converium Holdings (North America) Inc. to Ba1 from Baa1.