Willow Re has officially defaulted on it’s payment which was due on the 2nd February. They had a 5 day grace period to come up with the payment but now A.M. Best reports that they haven’t managed to come up with the full interest payment due. Willow Re intends to pay about 95% of the scheduled payment says Allstate, who issued the bond.
A.M. Best have now downgraded the catastrophe bonds notes to ‘D’, just as Standard & Poor’s did earlier this week. A.M. Best say they remain concerned about the future for Willow Re and are unsure it will generate sufficient cash to pay interest payments in the future.