Citing CDOs, Best Downgrades Great Western

A.M. Best Co., a credit rating agency headquartered in Oldwick, N.J., has downgraded Ogden, Utah-based Great Western Insurance Co.'s financial strength ratings from B-plus-plus to B-plus and its issuer credit rating from bbb-plus to bbb-minus because of problem investments in collateralized debt obligations. Its outlook has been revised from positive to stable. Great Western took a loss in 2007 because of the impairment of some of its CDOs. Best says it is worried about a possible negative impact from the company's remaining CDOs. "With continuing concerns over a weakened credit market and significant deterioration in the subprime mortgage loan market in the United States, A.M. Best notes that Great Western's balance sheet will remain under financial pressure, as additional CDOs may be impaired going forward," the rating agency said. "As a result, Great Western's capital and surplus position could decline further and could lead to additional pressure on the company's risk-adjusted capitalization relative to its insurance and investment profile."