Scor: Jefferies downgrades stock

(CercleFinance.com) - Jefferies said on Friday that it has downgraded Scor shares from "buy" to "hold" following S&P's decision to downgrade its rating on the reinsurer.


The US broker, which at the same time reduced its target price for the share from 22.5 euros to 17.5 euros, says that the credit ratings attributed by the rating agencies are vital for reinsurers, insofar as they evaluate their capacity to face a critical situation.

More prosaically, agency ratings are a determining factor in deciding the capital requirements that a reinsurer must post in order to insure the credit risk of counterparties, it adds.

With a downgraded rating, Scor is likely to become less competitive than its rivals, unless it offers lower pricing terms than them, Jefferies commented.


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