A.M. Best has assigned an indicative rating of "bbb-" to the
senior unsecured debt of the recently filed shelf registration of Hallmark
Financial Services Inc. (Hallmark Financial) (Nevada). The outlook
assigned to the rating is negative. All remaining ratings of Hallmark
Financial and its subsidiaries are unchanged.
As of today, the shelf is registered for senior unsecured debt only. As
per A.M. Best's methodology (Insurance Holdings Company and Debt
Ratings) the debt receives zero notching from the issuer credit rating
of Hallmark Financial.
Effective June 9, 2014, Hallmark Financial filed a shelf registration
for a senior unsecured debt at a proposed maximum aggregate offering
price of $30 million. Due to potential issuance f this new debt,
Hallmark Financial's debt-to-total capital and adjusted debt-to-tangible
capital measures have increased, but continue to remain within A.M.
Best's guidelines for its current rating level. In addition, Hallmark
Financial's interest coverage ratio is expected to remain adequate for
The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best's rating process and contains the different rating criteria
employed in the rating process. Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
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