A.M. Best Co. on Friday placed the financial strength rating of A- (Excellent) of Bermuda-based Goshawk Reinsurance Ltd. (Goshawk Re) under review with negative implications following an announcement by its parent, Goshawk Insurance Holdings Plc, that it may breach its banking covenants due to the need for additional reserve strengthening at Lloyd's Syndicate 102 -- which has a Best's syndicate rating of A- (Excellent).

A.M. Best said it believed Goshawk Re continued to have excellent current and prospective risk-adjusted capital, the under review status reflected its discussions with Goshawk Re's management regarding any revision to the group's revised financial arrangements and the potential impact that any shortfall of funding at Syndicate 102 may have on the group's overall financial flexibility.

"In the event that the group's financial flexibility is maintained at a level consistent with the current rating, A.M. Best would expect to affirm the rating," the agency said in a press release.