AM Best Downgrades Issuer Credit Rating of Cowen Reinsurance S.A.; Maintains Under Review With Negative Implications Status on Credit Ratings
These ratings reflect Cowen Re's balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).
The Long-Term ICR downgrade reflects the poor track record of Cowen Re's operating performance. Since its start of operations in 2016, Cowen Re has reported cumulative technical losses, which have been largely offset by investment gains. Cowen Re's five-year weighted average combined ratio stood at 122.9% (as calculated by AM Best). Furthermore, during its ongoing sale process that started after its acquisition by Toronto-Dominion Bank (TD Bank) in March 2023, Cowen Re is only renewing existing programmes and is not underwriting any new business, putting the company under greater expense strain.
Cowen Re's ratings were initially placed under review on June 15, 2023. This was due to the uncertainty regarding Cowen Re's future ownership, given that AM Best does not expect the company to form a part of TD Bank's long-term plans. Additionally, the negative implications status also reflects the uncertainty regarding the company's strategic plans and the negative trend on the company's business profile as Cowen Re is unable to underwrite new business. Although Cowen Re reported a pre-tax profit (before movements in equalisation reserves) of USD 9.95 million, mainly driven by investment income, technical performance remained under pressure, as reflected by a combined ratio of 118.4% at year-end 2024 (as calculated by AM Best).
The resolution of TD Bank's plans for the company has taken longer than AM Best originally expected. The ratings will remain under review with negative implications until AM Best has gained certainty regarding the company's long-term ownership and business plans.
This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.
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TORONTO, July 18, 2025 (GLOBE NEWSWIRE) — Clip Money Inc. (TSX-V: CLIP) (OTCQB: CLPMF) ('Clip Money' or the 'Company'), a company that operates a multi-bank self-service deposit system for businesses, is pleased to announce the closing of a non-brokered private placement of an unsecured convertible note (the 'Convertible Note') for gross proceeds of US$3,000,000 (or CAD$4,125,900, based on a CAD/USD exchange rate of US$1 = CAD$1.3753) to Cardtronics Inc. ('Cardtronics'), a subsidiary of NCR Atleos Corporation (the 'Convertible Note Financing'). Cardtronics is Clip Money's largest shareholder and also a strategic commercial partner through the NCR Atleos Allpoint ATM network. Cardtronics' continued support highlights its confidence in the Clip Money solution and team. 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On the Maturity Date, payment of all accrued and unpaid interest up to and including the Maturity Date that has not been previously satisfied by way of the quarterly interest payments will be satisfied by the Company, at Cardtronics' sole discretion, through: (i) a cash payment equal to the entirety of all accrued and unpaid interest up to and including the Maturity Date; (ii) the issuance of a number of Common Shares equal to the entirety of the accrued and unpaid interest up to the Maturity Date divided by the then-prevailing market price of the Common Shares on the TSX Venture Exchange (the 'TSXV'), subject to prior written approval of the TSXV; or (iii) a combination of a cash payment and the issuance of Common Shares at the then prevailing market price of the Common Shares on the TSXV, subject to prior written approval of the TSXV. Subject to the terms of the Convertible Note, if the Company redeems all or a portion of the Convertible Note prior to the three year anniversary thereof, it must pay a redemption price equal to 102% of the portion of the principal amount of the Convertible Note being redeemed plus all accrued and unpaid interest up to and including the redemption date on the portion of the principal amount being redeemed. Such a redemption shall be payable in cash or, at the election of the holder and subject to the prior written approval of the TSXV, be payable in Common Shares pursuant to the terms of the Convertible Note. Subject to the terms of the Convertible Note, if the Company redeems all or a portion of the Convertible Note after the three year anniversary thereof and until the date that is one day before the Maturity Date, it must pay a redemption price equal to 101% of the portion of the principal amount of the Convertible Note being redeemed plus all accrued and unpaid interest up to and including the redemption date on the portion of the principal amount being redeemed. Such a redemption shall be payable in cash or, at the election of the holder and subject to the prior written approval of the TSXV, be payable in Common Shares pursuant to the terms of the Convertible Note. The Financings represent related-party transactions under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ('MI 61-101'), but are exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the subject matter of the transactions nor the consideration paid exceeds 25% of the Company's market capitalization. All securities to be issued in connection with the Equity Financing and the Convertible Note Financing are subject to a statutory hold period of four months plus a day from the date hereof in accordance with applicable securities legislation in Canada. The Company intends to use the net proceeds from the Financings for network expansion and customer acquisition, new unit capital expenditures, business operations and technology and for general corporate purposes. There was no finder's fee paid in connection with the Financings. EARLY WARNING DISCLOSURE REGARDING BRIAN BAILEY In connection with closing of the Equity Financing, Brian Bailey, president and chief operating officer of Clip Money, acquired 3,438,250 Common Shares at a price of CAD$0.20 per Common Share pursuant to the terms of a subscription agreement. 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Following closing of the Equity Financing, Mr. Bailey will own (i) 10,672,016 Common Shares, (ii) the Convertible Note, (iii) 455,118 Warrants and (iv) 1,449,650 Options, representing approximately 9.51% of the issued and outstanding Common Shares of Clip Money on a non-diluted basis and approximately 11.59% of the issued and outstanding Common Shares of Clip Money on a partially diluted basis assuming the full conversion of the Bailey Convertible Note and the full exercise of the Warrants and Options. The securities of Clip Money are being held by Mr. Bailey for investment purposes and Mr. Bailey will evaluate his investment in the Company from time to time and may, based on such evaluation, market conditions and other circumstances, increase or decrease his shareholdings through market transactions, private agreements, or otherwise. This news release is being issued under the early warning provisions of Canadian securities legislation. A copy of the early warning report to be filed by Mr. Bailey in connection with the transactions described above will be available on the Company's SEDAR+ profile at . A copy of such report may also be obtained by contacting Joseph Arrage by telephone at 844-593-2547 or by email at jarrage@ . The Company's registered office is located at 333 Bay Street, Suite 3400, Toronto, Ontario, M5H 2S7. About Clip Money Inc. Clip operates a multi-bank self-service deposit system for businesses through the Clip Money network that gives users the capability of making deposits outside of their bank branch at top retailers and shopping malls. Rather than having to go to their personal bank branch or using a cash pickup service, businesses can deposit their cash at any ClipDrop Box or ClipATM located near them. After being deposited, the funds will automatically be credited to the business' bank account, usually within one business day. 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