Fitch Ratings has upgraded Black Gold Re’s insurer financial strength rating to “BBB+” from “BBB”, and revised its outlook to stable from positive.
The rating action follows the upgrade of Ecopetrol's local currency issuer default rating to “BBB+” with a stable outlook. Black Gold's rating is equalised to the rating of its shareholder, Ecopetrol.
Black Gold's ratings also reflect its good operating performance, strong capitalisation and liquidity levels, and adequate reinsurance protection.
Black Gold's status as a core subsidiary of Ecopetrol owes much to its strategic importance in managing the risks and structuring the insurance coverage of Grupo Empresarial Ecopetrol.
The support of the shareholder is evidenced by the formal support in managing the investment portfolio of the captive, the provision of resources for the optimal operation of the reinsurance company, the explicit commitment of support through open notes, and the transference of strong corporate governance practices.
The rating outlook is stable. Fitch may consider an upgrade if Ecopetrol's rating is upgraded and the company continues to demonstrate a strong operating and financial performance.
Negative changes to Ecopetrol's ratings or to its ability and willingness to provide support could result in a downgrade for the reinsurance firm.
