N@N

Majestic Capital Announces Downgrade of Majestic Insurance Company Rating by A.M. Best Co.

^{Published on 2011-03-28 04:40:41 - Market Wire}
 

HAMILTON, Bermuda--([ BUSINESS WIRE ])--Majestic Capital, Ltd. (Majestic Capital) (Nasdaq: MAJC) today announced that A.M. Best Co. (A.M. Best) has downgraded the financial strength rating of Majestic Insurance Company (Majestic), Majestic Capitala™s primary insurance subsidiary, to B (Fair) from B++ (Good). In addition, A.M. Best downgraded the debt ratings to accc+a from ab+a on the trust preferred securities of Majestic USA Capital, Inc. and Embarcadero Insurance Holdings, Inc. The status for all ratings was revised to under review with negative implications from under review with developing implications.

aThese rating actions follow Majestic Capitala™s announcement that Bayside Capital Partners LLC has terminated its previously announced merger agreement with Majestic Capital. The rating actions also recognize Majestica™s continued deterioration in its overall earnings and the material deterioration in the companya™s surplus. In addition, these actions reflect A.M. Besta™s heightened concerns with Majestic Capitala™s ongoing operations following the recent announcement of a potential conservation on its main operating subsidiary, which would be taken in conjunction with its proposed transaction with AmTrust Financial Services, Inc. A.M. Best will continue to monitor Majestic Capital and its subsidiaries as events develop,a A.M. Best said in its announcement.

A.M. Best ratings are directed toward the concerns of policyholders and insurance agencies and are not intended for the protection of investors or as a recommendation to buy, hold or sell securities.

About Majestic Capital, Ltd.

Majestic Capital, through its subsidiaries, is a specialty provider of workersa™ compensation insurance products and services. Further information about Majestic Capital and its business can be found on Majestic Capitala™s website at [ http://www.MajesticCapital.com ].

MAJC-E