Kingsway Financial Services Inc. reports that A.M. Best Co. has affirmed the financial strength rating of its largest insurance subsidiary, Lincoln General Insurance Co. of A- (Excellent).

The rating was removed from under review and assigned a negative outlook. This rating action is a result of Lincoln’s strengthened capital position, following Kingsway’s capital raising initiatives and the infusion of new capital into Lincoln.

A.M. Best remains concerned about Lincoln’s underwriting leverage position as well as its ability to effectively manage the additional volume of business. A.M. Best’s negative outlook reflects its concern that Lincoln may need additional capital by year-end if Lincoln continues to strain surplus through premium growth or if loss reserves continue to adversely develop.

“We are committed to maintaining our A.M. Best ratings and ensuring that our insurance subsidiaries are strongly capitalized,” said Bill Star, president and CEO of Kingsway.

In a separate release, Kingsway announced that it has commenced the marketing of its public offering of trust preferred securities.

The public offering is for US$50 million of trust preferred securities. The trust preferred securities will carry a dividend rate to be determined when marketing is completed.

The securities will be sold in the United States through a group of underwriters, including Advest, Inc., as lead managing underwriter, and Ferris, Baker Watts Incorporated, Keefe, Bruyette & Woods, Inc., Raymond James, Sandler O’Neill & Partners, L.P., Putnam Lovell NBF Securities Inc. and RBC Capital Markets, as co-managing underwriters.

The securities have been approved for listing on the New York Stock Exchange under the symbol KFS PrA.

http://www.newswire.ca/releases/September2003/17/c1789.html