Moody’s Cuts Superior National’s Ratings

Workers’ compensation insurer Superior National Insurance Group Inc.’s debt and financial strength ratings were cut by Moody’s Investors Service, which cited the insurer’s suit seeking $175 million from a reinsurer. The Calabasas-based company said that it has hired investment banker Wasserstein Perella & Co. to provide advice about its strategic and financial options. Superior National is suing Munich Reinsurance Co. affiliate Inter-Ocean Reinsurance Co. for funds allegedly owed under reinsurance sold to Business Insurance Group Inc., which Superior National bought last December. Moody’s trimmed ratings on Superior National’s insurance to “Ba3” from “Ba1” and to “B2” from “Ba3” for senior bank debt. Moody’s also kept a “negative outlook,” a sign the ratings may fall further. Standard & Poor’s Corp. downgraded its insurance earlier this week. Lower ratings mean a company must pay more for funds to compensate lenders for the implied greater risk of not being repaid. Its stock tumbled $1.44 to close at $2.81 on Nasdaq.