Bermuda insurer Trenwick Group's amendments to its credit agreements has put it under fire from rating agency AM Best.

Trenwick announced an agreement with a syndication of banks to amend its outstanding credit agreement resolved potential non-compliance issues under various financial covenants.

Despite the relaxation of certain loan covenants, AM Best said it continued to view the outlook relative to Trenwick's financial strength rating of A- (Excellent) as negative - reflecting continued concerns with regard to the group's capital adequacy and recent operating performance.

Although the company appears to be making progress and participating in the market recovery, both operating and financial leverage measures remain outside AM Best's expectation for this rating level. Trenwick has been challenged by difficult market conditions, which have resulted in significant operating losses in recent periods and a weakening of its capital base.

AM Best reported that it remains in discussion with management as to its long-term strategy for addressing these remaining issues and improving its financial flexibility.