AM Best has revised its ratings for Accredited, the programme management business of Bermudian-based R&Q Insurance Holdings Ltd that is to be sold to funds advised by Toronto-based Onex Corporation for $465 million.

The ratings agency said it has revised the implications of the under review status to developing from negative for the financial strength rating of A- (Excellent) and the long-term issuer credit ratings of “a-” (Excellent) of Arizona’s Accredited Specialty Insurance Company, Accredited Surety and Casualty Company Inc of Orlando, and Malta-based Accredited Insurance (Europe) Limited.

AM Best said the credit ratings reflect Accredited’s balance sheet strength, assessed as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The rating actions follow the announcement that R&Q Insurance Holdings Ltd had entered into a conditional agreement to sell 100 per cent of the equity interest in Randall & Quilter America Holdings Inc, the intermediate holding company of Accredited, to funds advised by the Onex Corporation.

Closing of the sale is conditional on R&Q majority shareholder approval, regulatory approvals and customary consents from certain R&Q debt providers.

The sale is also conditional on R&Q’s chief executive, William Spiegel, and chief financial officer, Thomas Solomon, transferring to Accredited upon the closing.

AM Best said the ratings were placed under review with negative implications on April 6 after the announcement on April 4 that R&Q was reviewing strategic options to separate its programme management and legacy insurance business, and that the group was expected to report a material operating loss for 2022.

It added that the ratings are expected to remain under review until the sale process is complete, at which point AM Best will assess the quality and extent of support provided by Onex Corporation to Accredited and resolve the ratings review for Accredited.